Are you really wanting the government to accept the value of
 something made from free labor, as an in-kind cost when no
 cost was incurred?  Does your organization really have to
 ask other people if it is "OK" to reap compounded profits
 from no investment?

 Is your organization taking profits from labor that isn't
 paid for?  Are they now wanting to take taxpayers' money for
 having used free labor to produce something they didn't pay
 for?  Sounds like your employeer may be on to whole new ways
 of exploiting both their employees and the rest of the US
 citizens.  Can this really be viewed as being "OK" within
 your organization?  Let alone legal?  Do you really need to
 ask?

 To me, this doesn't pass the old-fashioned "smell test".
 Forget legalities.  Like my dearly departed grandmother used
 to say, "When something stinks, it is probably rotten.
 Don't buy it".

 As a gov't employee with 18+ years of service, I have seen
 many times that it is hard for an organization to get
 support from an agency when career employees concerned with
 the proposal have a strong negative reaction to something in
 it.  If a grant proposal with the above characteristics
 passes my way for review within the Department of Energy, I
 would likely take the needed time to investigate it in
 detail, including the legal aspects, before making my
 recommendations.  Still, my first reaction would likely be
 "Don't buy it".

 All the above said with appropriate disclaimers.

          James Beall, Ph.D.
          xxxxxx@oer.doe.gov