FAR and DFARS › DFARS Part 231: Contract Cost Principles and Procedures › Subpart 231.2
DFARS 231.205-6 Compensation for personal services.
The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.
In plain English
This DFARS section makes certain compensation costs unallowable on DoD contracts. Bonuses or other payments above an employee's normal salary that are part of restructuring costs from a business combination are unallowable for contracts funded by FY1996 or later appropriations, except severance and early retirement incentives. Fringe benefit costs that violate law, an employer-employee agreement, or the contractor's established policy are also unallowable.
Applies to: DoD contracts funded by fiscal year 1996 or subsequent appropriations
Key terms: restructuring costs · business combination · severance payments · early retirement incentive payments · fringe benefit costs
Written by AI from this section's text. A guide, not legal advice: the text below rules.
The text
(f)(1) In accordance with Section 8122 of Pub. L. 104-61, and similar sections in subsequent Defense appropriations acts, costs for bonuses or other payments in excess of the normal salary paid by the contractor to an employee, that are part of restructuring costs associated with a business combination, are unallowable under DoD contracts funded by fiscal year 1996 or subsequent appropriations. This limitation does not apply to severance payments or early retirement incentive payments. (See 231.205-70(b) for the definitions of “business combination” and “restructuring costs.”)
(m)(1) Fringe benefit costs that are contrary to law, employer-employee agreement, or an established policy of the contractor are unallowable.
Sections it refers to
- 231.205-70 External restructuring costs.
← 231.205-1 Public relations and advertising costs. · 231.205-18 Independent research and development and bid and proposal costs. →
Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.