How to Calculate FCCM

Facilities capital cost of money (FCCM) is the method government agencies use to keep track of the estimated cost of contractors using their own company's money or property to invest in facilities and equipment that benefit the government. For federal agencies, it is governed by 48 Code of Federal Regulations (CFR) 9904.414, Cost Accounting Standards. The FCCM, a weighting factor for the assumed costs, is essential to the calculation but is the result of a similar but separate previous calculation.

Multiply each allocation base by its associated FCCM factor. For example, if the allocation base for manufacturing is $200,000 and manufacturing's FCCM factor is 0.7, then their product is $140,000.

Add together all the preliminary FCCM amounts from step 1. For example, $140,000 plus $360,000 plus $500,000 is $1,000,000.

 

Divide the result from step 2 by the Treasury rate. For example, with a Treasury rate of 5 percent, divide $1,000,000 by 0.05 to obtain a total FCCM of $20,000,000.

 

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About the Author

Joe Friedman began writing in 2008 while in the U.S. Air Force as a KC-10 tanker pilot. He is now an equipment engineer in the semiconductor manufacturing industry. Friedman holds a Bachelor of Science in engineering physics from Embry-Riddle Aeronautical University and a Master of Science in electrical engineering from Drexel University.