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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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151 sections with “allowable costs”: the first 40

  • FAR 31.201-6 Accounting for unallowable costs.
    (a) Costs that are expressly unallowable or mutually agreed to be unallowable, including mutually agreed to be unallowable directly associated costs, shall be identified and excluded from any billing, claim, or proposal applicable to a Gove…
  • FAR 52.216-26 Payments of Allowable Costs Before Definitization.
    As prescribed in 16.603-4(c), insert the following clause: Payments of Allowable Costs Before Definitization (DEC 2002) (a) Reimbursement rate. Pending the placing of the definitive contract referred to in this letter contract, the Govern…
  • FAR 52.242-3 Penalties for Unallowable Costs.
    As prescribed in 42.709-7, use the following clause: Penalties for Unallowable Costs (DEC 2022) (a) Definition. Proposal, as used in this clause, means either— (1) A final indirect cost rate proposal submitted by the Contractor after the…
  • FAR 31.110 Indirect cost rate certification and penalties on unallowable costs.
    …ding the certification provisions and the related contract clause prescription. (b) If unallowable costs are included in final indirect cost settlement proposals, penalties may be assessed. See 42.709 for administrative procedures regardin…
  • FAR 42.709 Penalties for Unallowable Costs.
  • FAR 31.205-47 Costs related to legal and other proceedings.
    … party in the name of the United States under the False Claims Act, 31 U.S.C. 3730, are unallowable if the result is— (1) In a criminal proceeding, a conviction; (2) In a civil or administrative proceeding, either a finding of contractor …
  • FAR 52.216-7 Allowable Cost and Payment.
    As prescribed in 16.307(a), insert the following clause: Allowable Cost and Payment (AUG 2018) (a) Invoicing. (1) The Government will make payments to the Contractor when requested as work progresses, but (except for small business concer…
  • FAR 31.205-21 Labor relations costs.
    … satisfactory relations between the contractor and its employees (other than those made unallowable in paragraph (b) of this section), including costs of shop stewards, labor management committees, employee publications, and other related a…
  • FAR 42.703-2 Certificate of indirect costs.
    …lly should be— (i) Based on audited historical data or other available data as long as unallowable costs are excluded; and (ii) Set low enough to ensure that unallowable costs will not be reimbursed. (d) False certification. The contract…
  • FAR 31.205-1 Public relations and advertising costs.
    …ons and activities identified in paragraphs (a) and (b) of this subsection. (d) The only allowable advertising costs are those that are— (1) Specifically required by contract, or that arise from requirements of Government contracts, and t…
  • FAR 31.205-13 Employee morale, health, welfare, food service, and dormitory costs and credits.
    …employee morale, and employee performance (less income generated by these activities) are allowable, subject to the limitations contained in this subsection. Some examples of allowable activities are— (1) House publications; (2) Health cl…
  • FAR 31.205-18 Independent research and development and bid and proposal costs.
    … (e) of this subsection, or as provided in agency regulations, costs for IR&D and B&P are allowable as indirect expenses on contracts to the extent that those costs are allocable and reasonable. (d) Deferred IR&D costs. (1) IR&D costs that…
  • FAR 31.205-22 Lobbying and political activity costs.
    (a) Costs associated with the following activities are unallowable: (1) Attempts to influence the outcomes of any Federal, State, or local election, referendum, initiative, or similar procedure, through in kind or cash contributions, endor…
  • FAR 31.205-33 Professional and consultant service costs.
    … or other forms of representation. (b) Costs of professional and consultant services are allowable subject to this paragraph and paragraphs (c) through (f) of this subsection when reasonable in relation to the services rendered and when no…
  • FAR 31.205-35 Relocation costs.
    …ployee or upon recruitment of a new employee. The following types of relocation costs are allowable as noted, subject to the limitations in paragraphs (b) and (f) of this subsection: (1) Costs of travel of the employee and members of the e…
  • FAR 31.205-42 Termination costs.
    …n items. The costs of items reasonably usable on the contractor's other work shall not be allowable unless the contractor submits evidence that the items could not be retained at cost without sustaining a loss. The contracting officer shoul…
  • FAR 31.205-44 Training and education costs.
    …d to the field in which the employee is working or may reasonably be expected to work are allowable, except as follows: (a) Overtime compensation for training and education is unallowable. (b) The cost of salaries for attending undergradu…
  • FAR 31.205-46 Travel costs.
    …tal expenses. (1) Costs incurred by contractor personnel on official company business are allowable, subject to the limitations contained in this subsection. Costs for transportation may be based on mileage rates, actual costs incurred, or …
  • FAR 15.404-4 Profit.
    …l total remuneration that contractors may receive for contract performance over and above allowable costs. This potential remuneration element and the Government's estimate of allowable costs to be incurred in contract performance together …
  • FAR 16.405-1 Cost-plus-incentive-fee contracts.
    …ially negotiated fee to be adjusted later by a formula based on the relationship of total allowable costs to total target costs. This contract type specifies a target cost, a target fee, minimum and maximum fees, and a fee adjustment formul…
  • FAR 31.205-6 Compensation for personal services.
    (a) General. Compensation for personal services is allowable subject to the following general criteria and additional requirements contained in other parts of this cost principle: (1) Compensation for personal services must be for work per…
  • FAR 31.205-14 Entertainment costs.
    … to shows or sports events, meals, lodging, rentals, transportation, and gratuities are unallowable. Costs made specifically unallowable under this cost principle are not allowable under any other cost principle. Costs of membership in soci…
  • FAR 31.205-36 Rental costs.
    … (FASB ASC) 840, Leases. (See 31.205-11 for Capital Leases.) (b) The following costs are allowable: (1) Rental costs under operating leases, to the extent that the rates are reasonable at the time of the lease decision, after consideratio…
  • FAR 31.205-38 Selling costs.
    … The costs of any selling efforts other than those addressed in this cost principle are unallowable. (b) Selling activity includes the following broad categories: (1) Advertising. Advertising is defined at 31.205-1(b), and advertising cos…
  • FAR 42.709-6 Waiver of the penalty.
    …udit work on a specific final indirect cost proposal has begun); (b) The amount of the unallowable costs under the proposal which are subject to the penalty is $10,000 or less (i.e., if the amount of expressly or previously determined unal…
  • FAR 52.216-10 Incentive Fee.
    …tracting Officer insert Contractor's participation] cents for every dollar that the total allowable cost is less than the target cost or decreased by ___ [Contracting Officer insert Contractor's participation] cents for every dollar that th…
  • FAR 52.232-12 Advance Payments.
    …ontractor may withdraw funds from the special account only to pay for properly allocable, allowable, and reasonable costs for direct materials, direct labor, and indirect costs. Other withdrawals require approval in writing by the administe…
  • DFARS 215.404-71-3 Contract type risk and working capital adjustment.
    … (A) The frequency of payments; (B) The total amount of payments compared to the maximum allowable amount specified at FAR 32.1004(b)(2); and (C) The risk of the payment schedule to the contractor. (2) Mandatory. (i) The contracting offi…
  • FAR 31.203 Indirect costs.
    …include in the base all items that would properly be part of the cost input base, whether allowable or unallowable, and these items shall bear their pro rata share of G&A costs. (e) The method of allocating indirect costs may require revis…
  • FAR 31.205-17 Idle facilities and idle capacity costs.
    …hat are excess to the contractor's current needs. (b) The costs of idle facilities are unallowable unless the facilities— (1) Are necessary to meet fluctuations in workload; or (2) Were necessary when acquired and are now idle because of…
  • FAR 31.205-30 Patent costs.
    (a) The following patent costs are allowable to the extent that they are incurred as requirements of a Government contract (but see 31.205-33): (1) Costs of preparing invention disclosures, reports, and other documents. (2) Costs for sear…
  • FAR 31.205-40 Special tooling and special test equipment costs.
    …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 th…
  • FAR 52.232-7 Payments under Time-and-Materials and Labor-Hour Contracts.
    … for in paragraph (b)(2) of this clause, the Government will reimburse the Contractor for allowable cost of materials provided the Contractor— (i) Has made payments for materials in accordance with the terms and conditions of the agreement…
  • DFARS 228.370-2 General.
    …aph (e)(4)(ii) of the clause at 252.228-7001 specifies that insurance premium costs are unallowable. In addition, paragraph (d)(4) of the clause provides that the Government's assumption of risk does not apply where the loss or damage is co…
  • FAR 16.307 Contract clauses.
    (a)(1) The contracting officer shall insert the clause at 52.216-7, Allowable Cost and Payment, in solicitations and contracts when a cost-reimbursement contract or a time-and-materials contract (other than a contract for a commercial produ…
  • FAR 31.105 Construction and architect-engineer contracts.
    …d from a commercial rental source, and furnished for use under Government contracts. (i) Allowable ownership and operating costs shall be determined as follows: (A) Actual cost data shall be used when such data can be determined for both …
  • FAR 31.204 Application of principles and procedures.
    (a) Costs are allowable to the extent they are reasonable, allocable, and determined to be allowable under 31.201, 31.202, 31.203, and 31.205. These criteria apply to all of the selected items that follow, even if particular guidance is pro…
  • FAR 31.205-4 Bonding costs.
    … fidelity bonds. (b) Costs of bonding required pursuant to the terms of the contract are allowable. (c) Costs of bonding required by the contractor in the general conduct of its business are allowable to the extent that such bonding is in…
  • FAR 31.205-11 Depreciation.
    (a) Depreciation on a contractor's plant, equipment, and other capital facilities is an allowable contract cost, subject to the limitations contained in this cost principle. For tangible personal property, only estimated residual values tha…
  • FAR 31.205-15 Fines, penalties, and mischarging costs.
    … contractor to comply with, Federal, State, local, or foreign laws and regulations, are unallowable except when incurred as a result of compliance with specific terms and conditions of the contract or written instructions from the contracti…

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.