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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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132 sections with “indirect cost”: the first 40

  • 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.
    … 4307, 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 …
  • FAR 42.707 Cost-sharing rates and limitations on indirect cost rates.
    …zed, 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 contr…
  • FAR 49.303-4 Adjustment of indirect costs.
    …ins 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 contract…
  • 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.
    …e: 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 gov…
  • FAR 31.205-42 Termination costs.
    …on, protection, and disposition of property acquired or produced for the contract. (iii) Indirect costs related to salary and wages incurred as settlement expenses in (i) and (ii); normally, such indirect costs shall be limited to payroll …
  • FAR 52.216-7 Allowable Cost and Payment.
    …irect travel; (E) Other direct in-house costs; and (F) Properly allocable and allowable indirect costs, as shown in the records maintained by the Contractor for purposes of obtaining reimbursement under Government contracts; and (iii) Th…
  • FAR 30.606 Resolving cost impacts.
    …ntive 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 th…
  • FAR 42.801 Notice of intent to disallow costs.
    … of 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 15.407-4 Should-cost review.
    …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 should-cost review is conducted relative to a contractor propo…
  • FAR 31.202 Direct costs.
    …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 cost objective. Direct costs of the contract shall be charged directly to the contract. …
  • FAR 31.205-22 Lobbying and political activity costs.
    … (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 regulatory or contrac…
  • DFARS 231.205-70 External restructuring costs.
    …employee relocation), nor do they include other routine or ordinary activities charged as indirect costs that would otherwise have been incurred (e.g., planning and analysis, contract administration and oversight, or recurring financial and…
  • FAR 2.101 Definitions.
    …the system. Affiliates means associated business concerns or individuals if, directly or indirectly either one controls or can control the other; or third party controls or can control both, except as follows: (1) For use in subpart 9.4, …
  • FAR 15.404-4 Profit.
    …supervision and coordination needed to perform the contract task. (C) Conversion-related indirect costs. This subfactor measures how much the indirect costs contribute to contract performance. The labor elements in the allocable indirect c…
  • FAR 15.407-1 Defective certified cost or pricing data.
    …ed. 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 before the “as of” d…
  • 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.
    …t 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) o…
  • FAR 42.705-1 Contracting officer determination procedure.
    …ing officer (or cognizant Federal agency official) responsible for establishing the final indirect cost rates: (1) Business units of a multidivisional corporation under the cognizance of a corporate administrative contracting officer (see …
  • FAR 42.705-2 Auditor determination procedure.
    …licability 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 cov…
  • 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.
    …ng 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 and indirect…
  • FAR 52.212-4 Contract Terms and Conditions—Commercial Products and Commercial Services.
    … for services to be excluded from the hourly rates prescribed in the schedule.]; and (E) Indirect costs specifically provided for in this clause. (iv) Subcontract means any contract, as defined in FAR Subpart 2.1, entered into with a subc…
  • FAR 52.219-9 Small Business Subcontracting Plan.
    … 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 means a subcon…
  • FAR 52.230-2 Cost Accounting Standards.
    … 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 practices currentl…
  • FAR 52.230-5 Cost Accounting Standards—Educational Institution.
    … 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 the same as the p…
  • FAR 52.230-6 Administration of Cost Accounting Standards.
    …esentative sample of affected CAS-covered contracts and subcontracts. (ii) The change in indirect rates multiplied by the total estimated base computed for each of the following groups: (A) Fixed-price contracts and subcontracts. (B) Fle…
  • 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 o…
  • DFARS 231.205-18 Independent research and development and bid and proposal costs.
    …&D 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.
    …inistrative 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 and indirect …
  • DFARS 252.242-7006 Accounting System Administration.
    …ulations, and management decisions, and may include subsystems for specific areas such as indirect and other direct costs, compensation, billing, labor, and general information technology. Material weakness means a deficiency or combinatio…
  • FAR 15.403-5 Instructions for submission of certified cost or pricing data and data other than certified cost or pricing data.
    …forward pricing rate agreements. Data supporting forward pricing rate agreements or final indirect cost proposals shall be submitted in a form acceptable to the contracting officer.
  • FAR 15.406-2 Certificate of current cost or pricing data.
    …n data may not be reasonably available before normal periodic closing dates (e.g., actual indirect costs). Data within the contractor's or a subcontractor's organization on matters significant to contractor management and to the Government …
  • FAR 19.704 Subcontracting plan requirements.
    …ces 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…
  • FAR 31.201-1 Composition of total cost.
    …ts 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 allocable credi…

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.