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

FAR 31.205-10 Cost of money.

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 cost of money is an imputed cost, not interest on borrowings, and is treated as an incurred cost for cost-reimbursement and progress payment purposes. It is allowable only if measured, assigned, and allocated under the applicable Cost Accounting Standards, the limits in 31.205-52 are followed, and the estimated facilities capital cost of money is specifically identified and proposed in the relevant cost proposal. Actual interest cost cannot be claimed instead of the calculated imputed cost of money.

Applies to: Contractors claiming cost of money on cost-reimbursement contracts or for progress payments under fixed-price contracts

What it requires

Measure, assign, and allocate cost of money in accordance with 48 CFR 9904.414 or 48 CFR 9904.417, as applicable
Follow the allowability limits in 31.205-52
Specifically identify and propose the estimated facilities capital cost of money in cost proposals for the contract under which it is claimed

Key terms: Cost of money · Imputed cost · Facilities capital cost of money · Cost of capital assets under construction · Incurred cost

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

The text

(a) General. Cost of money—

(1) Is an imputed cost that is not a form of interest on borrowings (see 31.205-20);

(2) Is an “incurred cost” for cost-reimbursement purposes under applicable cost-reimbursement contracts and for progress payment purposes under fixed-price contracts; and

(3) Refers to—

(i) Facilities capital cost of money (48 CFR 9904.414); and

(ii) Cost of money as an element of the cost of capital assets under construction (48 CFR 9904.417).

(b) Cost of money is allowable, provided—

(1) It is measured, assigned, and allocated to contracts in accordance with 48 CFR 9904.414 or measured and added to the cost of capital assets under construction in accordance with 48 CFR 9904.417, as applicable;

(2) The requirements of 31.205-52, which limit the allowability of cost of money, are followed; and

(3) The estimated facilities capital cost of money is specifically identified and proposed in cost proposals relating to the contract under which the cost is to be claimed.

Sections it refers to

31.205-20 Interest and other financial costs.
31.205-52 Asset valuations resulting from business combinations.

Sections that refer to it

15.408 Solicitation provisions and contract clauses.
31.201-1 Composition of total cost.
52.215-16 Facilities Capital Cost of Money.
52.232-16 Progress Payments.
215.404-71-4 Facilities capital employed.
215.404-73 Alternate structured approaches.

← 31.205-9 [Reserved] · 31.205-11 Depreciation. →

Rule changes for FAR Part 31

Federal Acquisition Regulation; Technical Amendments ↗ · final rule 2024-04-22 · effective 2024-05-22

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