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

FAR 31.201-5 Credits.

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 requires that any income, rebate, allowance, or other credit related to an allowable cost that the contractor receives or earns must be credited back to the Government, either by reducing the cost or by a cash refund. It matters because it prevents contractors from keeping such credits when the Government is paying for the underlying cost. Special rules for pension adjustments and asset reversions are found in 31.205-6(j)(3).

Applies to: Contractors receiving or accruing credits related to allowable costs

What it requires

  • Credit the Government for any applicable income, rebate, allowance, or other credit relating to an allowable cost
  • Provide the credit either as a cost reduction or by cash refund

Key terms: income · rebate · allowance · credit · allowable cost

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

The text

The applicable portion of any income, rebate, allowance, or other credit relating to any allowable cost and received by or accruing to the contractor shall be credited to the Government either as a cost reduction or by cash refund. See 31.205-6(j)(3) for rules governing refund or credit to the Government associated with pension adjustments and asset reversions.

Sections it refers to

  • 31.205-6 Compensation for personal services.

← 31.201-4 Determining allocability. · 31.201-6 Accounting for unallowable costs. →

Rule changes for FAR Part 31

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