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

FAR 31.201-4 Determining allocability.

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 when a cost is allocable to a Government contract. A cost is allocable if it can be assigned or charged to one or more cost objectives based on benefits received or another equitable relationship. It matters because it determines which costs a contractor can charge to a Government contract.

Applies to: Costs charged to Government contracts

Key terms: allocable · cost objectives · relative benefits received · equitable relationship · Government contract

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

The text

A cost is allocable if it is assignable or chargeable to one or more cost objectives on the basis of relative benefits received or other equitable relationship. Subject to the foregoing, a cost is allocable to a Government contract if it—

(a) Is incurred specifically for the contract;

(b) Benefits both the contract and other work, and can be distributed to them in reasonable proportion to the benefits received; or

(c) Is necessary to the overall operation of the business, although a direct relationship to any particular cost objective cannot be shown.

Sections that refer to it

← 31.201-3 Determining reasonableness. · 31.201-5 Credits. →

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 31.201-4 Determining allocability · SpendQuery