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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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64 sections with “allowable incurred 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 31.205-13 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 31.205-42 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 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…
  • DFARS 252.216-7009 Allowability of Legal Costs Incurred in Connection with a Whistleblower Proceeding.
    …r Proceeding (DEC 2022) Pursuant to 10 U.S.C. 3750, notwithstanding FAR clause 52.216-7, Allowable Cost and Payment— (a) The restrictions of FAR 31.205-47(b) on allowability of costs related to legal and other proceedings also apply to an…
  • 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…
  • 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 31.205-30 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 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 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 31.205-6 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 31.205-15 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 31.205-19 Insurance and indemnification.
    …insurance. (c) Whether or not the contract is subject to CAS, self-insurance charges are allowable subject to paragraph (e) of this subsection and the following limitations: (1) The contractor shall measure, assign, and allocate costs in …
  • FAR 31.205-32 Precontract costs.
    …ence is necessary to comply with the proposed contract delivery schedule. These costs are allowable to the extent that they would have been allowable if incurred after the date of the contract (see 31.109).
  • DFARS 231.205-18 Independent research and development and bid and proposal costs.
    …contracts. (iii)(A) For IR&D costs major contractors incurred on covered contracts to be allowable— (1) The contractor is required to report IR&D projects generating the IR&D costs to the Defense Technical Information Center (DTIC) using …
  • FAR 31.205-31 Plant reconversion costs.
    …e start of the Government contract, fair wear and tear excepted. Reconversion costs are unallowable except for the cost of removing Government property and the restoration or rehabilitation costs caused by such removal. However, in special …
  • 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…
  • FAR 31.205-48 Research and development costs.
    …e of a contract or amount of a grant for research and development effort, the excess is unallowable under any other Government contract.
  • FAR 42.801 Notice of intent to disallow costs.
    …tractor as early as practicable during contract performance that the cost is considered unallowable under the contract terms and to provide for timely resolution of any resulting disagreement. In the event of disagreement, the contractor ma…
  • 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…
  • FAR 52.242-1 Notice of Intent To Disallow Costs.
    …ncurred 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 t…
  • DFARS 225.7303-2 Cost of doing business with a foreign government or an international organization.
    … in Arms Regulations (22 CFR 126.8) may require Government approval for these costs to be allowable, in which case the appropriate Government approval shall be obtained; and (iv) Configuration studies and related technical services underta…
  • 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…
  • DFARS 231.205-70 External restructuring costs.
    …d with external restructuring activities shall not be allowed unless— (1) Such costs are allowable in accordance with FAR part 31 and DFARS part 231; (2) An audit of projected restructuring costs and restructuring savings is performed; (…
  • FAR 16.301-1 Description.
    Cost-reimbursement types of contracts provide for payment of allowable incurred costs, to the extent prescribed in the contract. These contracts establish an estimate of total cost for the purpose of obligating funds and establishing a ceil…
  • DFARS 217.7404-6 Allowable profit.
    When the final price of a UCA is negotiated after a substantial portion of the required performance has been completed, the head of the contracting activity shall ensure the profit allowed reflects— (a) Any reduced cost risk to the contrac…
  • DFARS 243.204-70-6 Allowable profit.
    When the final price of an unpriced change order is negotiated after a substantial portion of the required performance has been completed, the head of the contracting activity shall ensure the profit allowed reflects— (a) Any reduced cost …
  • FAR 2.101 Definitions.
    …ngement under which the contractor bears some of the burden of reasonable, allocable, and allowable contract cost. Covered territory business, as defined at 15 U.S.C. 632(ff) and 13 CFR 125.1, means a small business concern that has its pr…
  • FAR 31.001 Definitions.
    …uture result in terms of cost, based upon information available at the time. Expressly unallowable cost means a particular item or type of cost which, under the express provisions of an applicable law, regulation, or contract, is specifica…
  • FAR 31.201-1 Composition of total cost.
    …e the total cost of a contract includes all costs properly allocable to the contract, the allowable costs to the Government are limited to those allocable costs which are allowable pursuant to Part 31 and applicable agency supplements.
  • FAR 31.201-2 Determining allowability.
    (a) A cost is allowable only when the cost complies with all of the following requirements: (1) Reasonableness. (2) Allocability. (3) Standards promulgated by the CAS Board, if applicable, otherwise, generally accepted accounting princip…

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.