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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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388 sections with “direct cost”: 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 42.703-2 Certificate of indirect costs.
    …307, a proposal shall not be accepted and no agreement shall be made to establish final indirect cost rates unless the costs have been certified by the contractor. (b) Waiver of certification. (1) The agency head, or designee, may waive th…
  • FAR 42.707 Cost-sharing rates and limitations on indirect cost rates.
    …d, may call for the contractor to participate in the costs of the contract by accepting indirect cost rates lower than the anticipated actual rates. In such cases, a negotiated indirect cost rate ceiling may be incorporated into the contrac…
  • FAR 49.303-4 Adjustment of indirect costs.
    …s the clause at 52.216-7, Allowable Cost and Payment, and it appears that adjustment of indirect costs will unduly delay final settlement, the TCO, after obtaining information from the appropriate audit agency, may agree with the contractor…
  • FAR 52.216-15 Predetermined Indirect Cost Rates.
    As prescribed in 16.307(g), insert the following clause: Predetermined Indirect Cost Rates (APR 1998) (a) Notwithstanding the Allowable Cost and Payment clause of this contract, the allowable indirect costs under this contract shall be ob…
  • FAR 52.242-4 Certification of Final Indirect Costs.
    As prescribed in 42.703-2(f), insert the following clause: Certification of Final Indirect Costs (JAN 1997) (a) The Contractor shall— (1) Certify any proposal to establish or modify final indirect cost rates; (2) Use the format in parag…
  • FAR 31.110 Indirect cost rate certification and penalties on unallowable costs.
    (a) Certain contracts require certification of the indirect cost rates proposed for final payment purposes. See 42.703-2 for administrative procedures regarding the certification provisions and the related contract clause prescription. (b)…
  • FAR 42.705 Final indirect cost rates.
    (a) Final indirect cost rates shall be established on the basis of— (1) Contracting officer determination procedure (see 42.705-1) or (2) Auditor determination procedure (see 42.705-2). (b) Within 120 days (or longer period, if approved …
  • DFARS 242.705 Final indirect cost rates.
  • DFARS 252.215-7014 Exception from Certified Cost or Pricing Data Requirements for Foreign Military Sales Indirect Offsets.
    … Exception From Certified Cost or Pricing Data Requirements for Foreign Military Sales Indirect Offsets (DEC 2022) (a) Definition. As used in this clause— Offset means a benefit or obligation agreed to by a contractor and a foreign gover…
  • FAR 31.201-6 Accounting for unallowable costs.
    …lowable 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 Government contract. A directly assoc…
  • FAR 31.205-22 Lobbying and political activity costs.
    …ivities; or (6) Costs incurred in attempting to improperly influence (see 3.401), either directly or indirectly, an employee or officer of the Executive branch of the Federal Government to give consideration to or act regarding a regulator…
  • FAR 31.205-42 Termination costs.
    …starting load costs. (3) When initial costs are included in the settlement proposal as a direct charge, such costs shall not also be included in overhead. Initial costs attributable to only one contract shall not be allocated to other cont…
  • FAR 52.216-7 Allowable Cost and Payment.
    … has paid by cash, check, or other form of actual payment for items or services purchased directly for the contract; (ii) When the Contractor is not delinquent in paying costs of contract performance in the ordinary course of business, cos…
  • FAR 52.216-26 Payments of Allowable Costs Before Definitization.
    …m payment by cash, check, or other form of actual payment for items or services purchased directly for the contract; (2) When the Contractor is not delinquent in payment of costs of contract performance in the ordinary course of business, …
  • DFARS 231.205-70 External restructuring costs.
    …cturing activities undertaken within one company. External restructuring activities are a direct outgrowth of a business combination. They normally will be initiated within 3 years of the business combination. (3) Restructuring activities …
  • FAR 15.407-1 Defective certified cost or pricing data.
    … were not submitted. Such offsets need not be in the same cost groupings (e.g., material, direct labor, or indirect costs). (6) An offset shall not be allowed if— (i) The understated data were known by the contractor to be understated bef…
  • FAR 15.407-4 Should-cost review.
    …cost review. (1) A program should-cost review is used to evaluate significant elements of direct costs, such as material and labor, and associated indirect costs, usually associated with the production of major systems. When a program shoul…
  • FAR 30.606 Resolving cost impacts.
    …ive type contracts. (3) When using an alternate method that excludes the costs from an indirect cost pool, the CFAO shall— (i) Apply such exclusion only to the determination of final indirect cost rates (see 42.705); and (ii) Adjust the …
  • FAR 42.801 Notice of intent to disallow costs.
    …f any segment of the contractor's organization. (e) If the notice involves elements of indirect cost, it shall not be issued without coordination with the contracting officer or auditor having authority for final indirect cost settlement (…
  • FAR 31.205-47 Costs related to legal and other proceedings.
    …tained by the contractor or subcontractor to assist it; costs of employees, officers, and directors; and any similar costs incurred before, during, and after commencement of a judicial or administrative proceeding which bears a direct relat…
  • FAR 52.230-2 Cost Accounting Standards.
    … as required by 48 CFR 9903.202-1 through 9903.202-5, including methods of distinguishing direct costs from indirect costs and the basis used for allocating indirect costs. The practices disclosed for this contract shall be the same as the …
  • FAR 52.230-5 Cost Accounting Standards—Educational Institution.
    … as required by 48 CFR 9003.202-1 through 9903.202-5, including methods of distinguishing direct costs from indirect costs and the basis used for accumulating and allocating indirect costs. The practices disclosed for this contract shall be…
  • FAR 52.249-6 Termination (Cost-Reimbursement).
    …nvenience of the Government. (c) After receipt of a Notice of Termination, and except as directed by the Contracting Officer, the Contractor shall immediately proceed with the following obligations, regardless of any delay in determining o…
  • DFARS 252.235-7001 Indemnification Under 10 U.S.C. 3861—Cost Reimbursement.
    …e of the Government's property. (c) The claim, loss, or damage— (1) Must arise from the direct performance of this contract; (2) Must not be compensated by insurance or other means, or be within deductible amounts of the Contractor's ins…
  • FAR 2.101 Definitions.
    …ntract performance, contract administration, and those technical and management functions directly related to the process of fulfilling agency needs by contract. Acquisition planning means the process by which the efforts of all personnel …
  • FAR 3.104-1 Definitions.
    …, honoraria, commissions, professional fees, and any other form of compensation, provided directly or indirectly for services rendered. Compensation is indirectly provided if it is paid to an entity other than the individual, specifically i…
  • FAR 15.404-2 Data to support proposal analysis.
    …ity of the field pricing review, results, including supporting rationale, may be reported directly to the contracting officer orally, in writing, or by any other method acceptable to the contracting officer. (i) Whenever circumstances perm…
  • FAR 15.404-4 Profit.
    …gorized as equipment, as defined in FAR 45.101, and where such equipment is to be charged directly to the contract. Before applying profit or fee factors, the contracting officer shall exclude any facilities capital cost of money included i…
  • FAR 16.601 Time-and-materials contracts.
    (a) Definitions for the purposes of Time-and-Materials Contracts. Direct materials means those materials that enter directly into the end product, or that are used or consumed directly in connection with the furnishing of the end product o…
  • FAR 19.704 Subcontracting plan requirements.
    …s for solicitation purposes; (6) A statement as to whether or not the offeror included indirect costs in establishing subcontracting goals (for commercial plans, see paragraph (d) of this section), and a description of the method used to d…
  • FAR 31.001 Definitions.
    …ost, or a group of items of cost, to one or more cost objectives. This term includes both direct assignment of cost and the reassignment of a share from an indirect cost pool. Compensated personal absence means any absence from work for re…
  • FAR 31.105 Construction and architect-engineer contracts.
    …ement contracts, including cost-reimbursement subcontracts thereunder; (2) Negotiating indirect cost rates; (3) Proposing, negotiating, or determining costs under terminated contracts; (4) Price revision of fixed-price incentive contract…
  • FAR 31.201-1 Composition of total cost.
    …tandard costs properly adjusted for applicable variances, of a contract is the sum of the direct and indirect costs allocable to the contract, incurred or to be incurred, plus any allocable cost of money pursuant to 31.205-10, less any allo…
  • FAR 31.205-26 Material costs.
    …e, and material returned to vendors; and (2) Credit such income and other credits either directly to the cost of the material or allocate such income and other credits as a credit to indirect costs. When the contractor can demonstrate that…
  • FAR 31.205-35 Relocation costs.
    …oans. (d) If relocation costs for an employee have been allowed either as an allocable indirect or direct cost, and the employee resigns within 12 months for reasons within the employee's control, the contractor shall refund or credit the …
  • FAR 31.205-38 Selling costs.
    …the allowability provisions of 31.205-12. Other market planning costs are allowable. (5) Direct selling. Direct selling efforts are those acts or actions to induce particular customers to purchase particular products or services of the con…
  • FAR 36.205 Statutory cost limitations.
    …at the price on each schedule shall include an approximate apportionment of all estimated direct costs, allocable indirect costs, and profit. (c) The Government shall reject an offer if its prices exceed applicable statutory limitations, u…
  • 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 (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.