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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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253 sections with “direct costs”: 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 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 52.242-4 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 31.205-22 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 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 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 52.216-26 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 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 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 31.205-47 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 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 31.205-26 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 31.205-38 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 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 42.704 Billing rates.
    …Federal agency official) or auditor responsible under 42.705 for establishing the final indirect cost rates also shall be responsible for determining the billing rates. (b) The contracting officer (or cognizant Federal agency official) or …
  • FAR 42.705-2 Auditor determination procedure.
    …cability and responsibility. (1) The cognizant Government auditor shall establish final indirect cost rates for business units not covered in 42.705-1(a). (2) In addition, auditor determination may be used for business units that are cover…
  • FAR 42.705-3 Educational institutions.
    (a) General. (1) Postdetermined final indirect cost rates shall be used in the settlement of indirect costs for all cost-reimbursement contracts with educational institutions, unless predetermined final indirect cost rates are authorized an…
  • FAR 42.708 Quick-closeout procedure.
    …e contracting officer responsible for contract closeout shall negotiate the settlement of direct and indirect costs for a specific contract, task order, or delivery order to be closed, in advance of the determination of final direct costs a…
  • 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 47.305-7 Quantity analysis, direct delivery, and reduction of crosshauling and backhauling.
    … using activities on the same transportation route or in the same geographical area. (b) Direct delivery. When it is the usual practice of a requiring activity to acquire supplies in large quantities for shipment to a central point and sub…
  • FAR 52.212-4 Contract Terms and Conditions—Commercial Products and Commercial Services.
    … officers, employees and agents against liability, including costs, for actual or alleged direct or contributory infringement of, or inducement to infringe, any United States or foreign patent, trademark or copyright, arising out of the per…
  • 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 52.219-9 Small Business Subcontracting Plan.
    …ged concern under the criteria at 43 U.S.C. 1626(e)(1). This definition also includes ANC direct and indirect subsidiary corporations, joint ventures, and partnerships that meet the requirements of 43 U.S.C. 1626(e)(2). Commercial plan mea…
  • FAR 52.232-7 Payments under Time-and-Materials and Labor-Hour Contracts.
    …d by multiplying the appropriate hourly rates prescribed in the Schedule by the number of direct labor hours performed. (3) The hourly rates shall be paid for all labor performed on the contract that meets the labor qualifications specifie…
  • FAR 52.232-12 Advance Payments.
    …e 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 administering office. Determinations of wheth…
  • FAR 52.242-3 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 expiration of its fiscal year which— (i) Relates to any payment made on the basis of …
  • DFARS 231.205-18 Independent research and development and bid and proposal costs.
    … projects. (iv) Contractors are required to report incurred IR&D costs separately from indirect costs. (v) Contractors are required to report incurred B&P costs separately from other indirect costs.
  • DFARS 242.708 Quick-closeout procedure.
    … Agency administrative contracting officers are authorized to negotiate the settlement of direct and indirect costs for a specific contract, task order, or delivery order to be closed in advance of the determination of final direct costs an…
  • DFARS 252.204-7023 Reporting Requirements for Contracted Services.
    …) Definition. As used in this clause— First-tier subcontract means a subcontract awarded directly by the contractor for the purpose of acquiring services for performance of a prime contract. It does not include the contractor's supplier ag…

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.