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FAR and DFARS › FAR Part 31: Contract Cost Principles and Procedures › Subpart 31.2

FAR 31.201-1 Composition of total cost.

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 section explains that a contract's total cost is the sum of its allocable direct and indirect costs, plus any allocable cost of money, minus allocable credits. It matters because it also makes clear that not every cost included in total cost is necessarily reimbursable by the Government — only those that are allowable under Part 31 and applicable agency supplements.

Applies to: Costs of a Government contract

Key terms: total cost · direct costs · indirect costs · allocable cost of money · allocable credits

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

(a) The total cost, including standard costs properly adjusted for applicable variances, of a contract is the sum of the direct and indirect costs allocable to the contract, incurred or to be incurred, plus any allocable cost of money pursuant to 31.205-10, less any allocable credits. In ascertaining what constitutes a cost, any generally accepted method of determining or estimating costs that is equitable and is consistently applied may be used.

(b) While the total cost of a contract includes all costs properly allocable to the contract, the allowable costs to the Government are limited to those allocable costs which are allowable pursuant to Part 31 and applicable agency supplements.

Sections it refers to

← 31.201 General. · 31.201-2 Determining allowability. →

Rule changes for FAR Part 31

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 31.201-1 Composition of total cost · SpendQuery