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48 CFR · Federal Acquisition Regulation and Defense supplement

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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.

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94 sections with “Cost objective”: the first 40

  • FAR 31.202 Direct costs.
    (a) No final cost objective shall have allocated to it as a direct cost any cost, if other costs incurred for the same purpose in like circumstances have been included in any indirect cost pool to be allocated to that or any other final cos…
  • FAR 31.203 Indirect costs.
    (a) For contracts subject to full CAS coverage, allocation of indirect costs shall be based on the applicable provisions. For all other contracts, the applicable CAS provisions in paragraphs (b) through (h) of this section apply. (b) After…
  • FAR 31.205-18 Independent research and development and bid and proposal costs.
    …opment, defined in this subsection. Basic research, (See 2.101). Bid and proposal (B&P) costs means the costs incurred in preparing, submitting, and supporting bids and proposals (whether or not solicited) on potential Government or non-G…
  • FAR 15.406-1 Prenegotiation objectives.
    …tance, audit reports and technical analysis, fact-finding results, independent Government cost estimates and price histories. (b) The contracting officer shall establish prenegotiation objectives before the negotiation of any pricing actio…
  • FAR 15.407-4 Should-cost review.
    (a) General. (1) Should-cost reviews are a specialized form of cost analysis. Should-cost reviews differ from traditional evaluation methods because they do not assume that a contractor's historical costs reflect efficient and economical op…
  • FAR 16.306 Cost-plus-fixed-fee contracts.
    (a) Description. A cost-plus-fixed-fee contract is a cost-reimbursement contract that provides for payment to the contractor of a negotiated fee that is fixed at the inception of the contract. The fixed fee does not vary with actual cost, b…
  • FAR 16.405-1 Cost-plus-incentive-fee contracts.
    (a) Description. The cost-plus-incentive-fee contract is a cost-reimbursement contract that provides for the initially negotiated fee to be adjusted later by a formula based on the relationship of total allowable costs to total target costs…
  • FAR 17.105-2 Objectives.
    …r contracting is encouraged to take advantage of one or more of the following: (a) Lower costs. (b) Enhancement of standardization. (c) Reduction of administrative burden in the placement and administration of contracts. (d) Substantial…
  • FAR 31.205-13 Employee morale, health, welfare, food service, and dormitory costs and credits.
    (a) Aggregate costs incurred on activities designed to improve working conditions, employer-employee relations, employee morale, and employee performance (less income generated by these activities) are allowable, subject to the limitations …
  • FAR 52.246-8 Inspection of Research and Development—Cost-Reimbursement.
    …bjective is the delivery of end items other than designs, drawings, or reports, and (b) a cost-reimbursement contract is contemplated; unless use of the clause is impractical and the clause prescribed in 46.309 is considered to be more appr…
  • DFARS 215.404-71-5 Cost efficiency factor.
    (a) This special factor provides an incentive for contractors to reduce costs. To the extent that the contractor can demonstrate cost reduction efforts that benefit the pending contract, the contracting officer may increase the prenegotiati…
  • DFARS 215.407-4 Should-cost review.
    …PGI 215.407-4 for guidance on determining whether to perform a program or overhead should-cost review. (b) Program should-cost review. Major weapon system should-cost program reviews shall be conducted in a manner that is transparent, obje…
  • DFARS 216.405-2 Cost-plus-award-fee contracts.
    …termining official's final evaluation of the contractor's overall performance against the cost, schedule, and performance outcomes specified in the award-fee plan. (3) Limitations. (i) The cost-plus-award-fee contract shall not be used— …
  • FAR 2.101 Definitions.
    … comprehensive plan for fulfilling the agency need in a timely manner and at a reasonable cost. It includes developing the overall strategy for managing the acquisition. Activity Address Code (AAC) means a distinct six-position code consis…
  • FAR 7.105 Contents of written acquisition plans.
    …ements for compatibility with existing or future systems or programs; and (ii) Any known cost, schedule, and capability or performance constraints. (3) Cost. Set forth the established cost goals for the acquisition and the rationale suppo…
  • FAR 15.404-4 Profit.
    … or fee portion of the Government prenegotiation objective in price negotiations based on cost analysis. (1) Profit or fee prenegotiation objectives do not necessarily represent net income to contractors. Rather, they represent that elemen…
  • FAR 15.405 Price negotiation.
    (a) The purpose of performing cost or price analysis is to develop a negotiation position that permits the contracting officer and the offeror an opportunity to reach agreement on a fair and reasonable price. A fair and reasonable price doe…
  • FAR 31.001 Definitions.
    As used in this part— Accrued benefit cost method means an actuarial cost method under which units of benefits are assigned to each cost accounting period and are valued as they accrue; i.e., based on the services performed by each employe…
  • FAR 31.205-41 Taxes.
    (a) The following types of costs are allowable: (1) Federal, State, and local taxes (see part 29), except as otherwise provided in paragraph (b) below that are required to be and are paid or accrued in accordance with generally accepted ac…
  • DFARS 215.404-71-4 Facilities capital employed.
    …cilities capital estimates. The contracting officer shall estimate the facilities capital cost of money and capital employed using— (1) An analysis of the appropriate Forms CASB-CMF and cost of money factors (48 CFR 9904.414 and FAR 31.205…
  • DFARS 252.242-7004 Material Management and Accounting System.
    …ities for scrap, shrinkage, yield, etc.; and (2) Charged or billed to contracts or other cost objectives in a manner consistent with the need to fulfill the production plan. (b) General. The Contractor shall— (1) Maintain an MMAS that— …
  • DFARS 252.242-7006 Accounting System Administration.
    …t— (1) Applicable laws and regulations are complied with; (2) The accounting system and cost data are reliable; (3) Risk of misallocations and mischarges are minimized; and (4) Contract allocations and charges are consistent with billin…
  • FAR 31.101 Objectives.
    In recognition of differing organizational characteristics, the cost principles and procedures in the succeeding subparts are grouped basically by organizational type; e.g., commercial concerns and educational institutions. The overall obje…
  • FAR 31.201-4 Determining allocability.
    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— …
  • FAR 34.202 Integrated Baseline Reviews.
    …the Performance Measurement Baseline (PMB) to successfully execute the project and attain cost objectives, recognizing the relationship between budget resources, funding, schedule, and scope of work; (4) Availability of personnel, faciliti…
  • DFARS 215.404-74 Fee requirements for cost-plus-award-fee contracts.
    In developing a fee objective for cost-plus-award-fee contracts, the contracting officer shall— (a) Follow the guidance in FAR 16.405-2 and 216.405-2; (b) Not use the weighted guidelines method or alternate structured approach; (c) Apply…
  • FAR 1.102-2 Performance standards.
    (a) Satisfy the customer in terms of cost, quality, and timeliness of the delivered product or service. (1) The principal customers for the product or service provided by the System are the users and line managers, acting on behalf of the A…
  • FAR 15.404-1 Proposal analysis techniques.
    …evel of detail of the analysis required. (2) Price analysis shall be used when certified cost or pricing data are not required (see paragraph (b) of this subsection and 15.404-3). (3) Cost analysis shall be used to evaluate the reasonable…
  • FAR 15.406-3 Documenting the negotiation.
    …on) to the extent they affected and were considered in the negotiation. (5) If certified cost or pricing data were not required in the case of any price negotiation exceeding the certified cost or pricing data threshold, the exception used…
  • FAR 16.103 Negotiating contract type.
    …onsidered together. The objective is to negotiate a contract type and price (or estimated cost and fee) that will result in reasonable contractor risk and provide the contractor with the greatest incentive for efficient and economical perfo…
  • FAR 16.401 General.
    …ontract is not appropriate and the required supplies or services can be acquired at lower costs and, in certain instances, with improved delivery or technical performance, by relating the amount of profit or fee payable under the contract t…
  • FAR 17.106-1 General.
    …g requirements subject to cancellation. For example, consider that the total nonrecurring costs (see 15.408, Table 15-2, III. Formats for Submission of Line Item Summaries C(8)) are estimated at 10 percent of the total multiyear price, and …
  • FAR 17.106-3 Special procedures applicable to DoD, NASA, and the Coast Guard.
    …or termination of a prime contract, the performance of which is deficient with respect to cost, quality, or schedule. (c) Cancellation or termination for insufficient funding. In the event funds are not made available for the continuation …
  • FAR 27.408 Cosponsored research and development activities.
    … require the contractor to make substantial contributions of funds or resources (e.g., by cost-sharing or by repayment of nonrecurring costs), and the contractor's and the Government's respective contributions to any item, component, proces…
  • FAR 31.102 Fixed-price contracts.
    …ice contracts, subcontracts, and modifications to contracts and subcontracts whenever (a) cost analysis is performed, or (b) a fixed-price contract clause requires the determination or negotiation of costs. However, application of cost prin…
  • FAR 31.205-6 Compensation for personal services.
    …e following general criteria and additional requirements contained in other parts of this cost principle: (1) Compensation for personal services must be for work performed by the employee in the current year and must not represent a retroa…
  • FAR 35.006 Contracting methods and contract type.
    …applies in R&D contracting only to the extent that goals, objectives, specifications, and cost estimates are sufficient to permit such a preference. The precision with which the goals, performance objectives, and specifications for the work…
  • FAR 35.007 Solicitations.
    … an inordinate number of R&D proposals from sources lacking appropriate qualifications is costly and time-consuming to both industry and the Government. Therefore, contracting officers should initially distribute solicitations only to sourc…
  • FAR 42.703-1 Policy.
    (a) A single agency (see 42.705-1) shall be responsible for establishing final indirect cost rates for each business unit. These rates shall be binding on all agencies and their contracting offices, unless otherwise specifically prohibited …
  • FAR 46.308 Cost-reimbursement research and development contracts.
    …cting officer shall insert the clause at 52.246-8, Inspection of Research and Development—Cost-Reimbursement, in solicitations and contracts for research and development when (a) the primary objective of the contract is the delivery of end …

FAR (chapter 1)

DFARS (chapter 2, Defense)

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Rule changes in progress: FAR, DFARS. Terms: glossary.