SpendQueryBeta

FAR and DFARS › FAR Part 52: Solicitation Provisions and Contract Clauses › Subpart 52.2

FAR 52.242-1 Notice of Intent To Disallow 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 clause allows the Contracting Officer to notify the contractor in writing that certain costs are intended to be disallowed. The contractor may respond with justification within 60 days, and the Contracting Officer must then either withdraw the notice or issue a decision within 60 days. It matters because it sets a process for challenging disallowed costs, but the Government's right to later question costs is not lost if no notice is given.

Applies to: Cost-reimbursement, fixed-price incentive, or price redetermination contracts

What it requires

  • Contractor may submit a written response with justification within 60 days of receiving a notice.
  • Contracting Officer shall, within 60 days of receiving the contractor's response, either withdraw the notice or issue a written decision.

Key terms: Notice of Intent to Disallow Costs · Contracting Officer · disallow · cost-reimbursement contract · fixed-price incentive contract

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

The text

As prescribed in 42.802, insert the following clause in solicitations and contracts when a cost-reimbursement contract, a fixed-price incentive contract, or a contract providing for price redetermination is contemplated:

Notice of Intent To Disallow Costs (APR 1984)

(a) Notwithstanding any other clause of this contract—

(1) The Contracting Officer may at any time issue to the Contractor a written notice of intent to disallow specified costs incurred or planned for incurrence under this contract that have been determined not to be allowable under the contract terms; and

(2) The Contractor may, after receiving a notice under subparagraph (1) above, submit a written response to the Contracting Officer, with justification for allowance of the costs. If the Contractor does respond within 60 days, the Contracting Officer shall, within 60 days of receiving the response, either make a written withdrawal of the notice or issue a written decision.

(b) Failure to issue a notice under this Notice of Intent to Disallow Costs clause shall not affect the Government's rights to take exception to incurred costs.

(End of clause)

Sections it refers to

Sections that refer to it

← 52.241-13 Capital Credits. · 52.242-2 Production Progress Reports. →

Rule changes for FAR Part 52

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

FAR 52.242-1 Notice of Intent To Disallow Costs · SpendQuery