2-34.8 Reasonableness

A cost is reasonable if it is a type of cost and amount that does not exceed what a prudent person would incur conducting competitive business. In determining the reasonableness of a specific cost, consider:

• Whether it is a type of cost generally recognized as ordinary and necessary for conducting business or performing the contract.
• Restraints imposed by generally accepted business practices, arm’s-length bargaining, and Federal and state laws and regulations.
• What a prudent business person, considering his or her responsibilities to owners, employees, customers, the Postal Service, and the public at large, would do under the circumstances.
• Any deviations from the supplier’s established business practices that may unjustifiably increase costs.