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

FAR 31.205-40 Special tooling and special test equipment costs.

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 the cost of special tooling and special test equipment used on Government contracts is allowable and how it must be allocated. Costs are generally charged to the specific contract for which the items were acquired, but certain pre-existing or excluded items may only be recovered as depreciation or amortization. It also allows costs for adapting items that are not truly special tooling and for returning them to their prior configuration.

Applies to: Contractors incurring costs for special tooling and special test equipment on Government contracts

What it requires

  • Allocate the cost of special tooling and special test equipment to the specific Government contract or contracts for which acquired
  • Treat the cost of items acquired before the contract effective date (or replacements) and items specifically excluded by the contract schedule as allowable only as depreciation or amortization

Key terms: special tooling · special test equipment · depreciation · amortization · contract schedule

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

The text

(a) The terms “special tooling” and “special test equipment” are defined in 2.101.

(b) The cost of special tooling and special test equipment used in performing one or more Government contracts is allowable and shall be allocated to the specific Government contract or contracts for which acquired, except that the cost of (1) items acquired by the contractor before the effective date of the contract (or replacement of such items), whether or not altered or adapted for use in performing the contract, and (2) items which the contract schedule specifically excludes, shall be allowable only as depreciation or amortization.

(c) When items are disqualified as special tooling or special test equipment because with relatively minor expense they can be made suitable for general purpose use and have a value as such commensurate with their value as special tooling or special test equipment, the cost of adapting the items for use under the contract and the cost of returning them to their prior configuration are allowable.

Sections it refers to

← 31.205-39 Service and warranty costs. · 31.205-41 Taxes. →

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 31.205-40 Special tooling and special test equipment costs · SpendQuery