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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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69 sections with “unallowable 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 52.242-3 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.
    …arding 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 regard…
  • FAR 42.709 Penalties for Unallowable Costs.
  • FAR 31.205-47 Costs related to legal and other proceedings.
    …rd 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 contracto…
  • FAR 42.703-2 Certificate of indirect costs.
    …rally 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 contra…
  • FAR 31.205-21 Labor relations costs.
    …ng 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…
  • 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 31.205-44 Training and education costs.
    …re allowable, except as follows: (a) Overtime compensation for training and education is unallowable. (b) The cost of salaries for attending undergraduate level classes or part-time graduate level classes during working hours is unallowab…
  • FAR 31.205-6 Compensation for personal services.
    …d after it, an opportunity to review the allowability of the changes. (5) Costs that are unallowable under other paragraphs of this Subpart 31.2 are not allowable under this subsection 31.205-6 solely on the basis that they constitute comp…
  • FAR 42.709-6 Waiver of the penalty.
    … audit 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 un…
  • FAR 31.205-14 Entertainment costs.
    …ts 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 so…
  • FAR 31.205-35 Relocation costs.
    …ate employees to relocate promptly and economically. (3) The costs must not be otherwise unallowable under subpart 31.2. (4) Amounts to be reimbursed shall not exceed the employee's actual expenses, except as provided for in paragraphs (b…
  • FAR 31.205-36 Rental costs.
    …insurance, facilities capital cost of money, and maintenance (excluding interest or other unallowable costs pursuant to part 31), provided that no part of such costs shall duplicate any other allowed cost. Rental cost of personal property l…
  • FAR 31.203 Indirect costs.
    …e 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 revision when ther…
  • FAR 31.205-13 Employee morale, health, welfare, food service, and dormitory costs and credits.
    …ines, living accommodations; and (ii) Similar types of services. (b) Costs of gifts are unallowable. (Gifts do not include awards for performance made pursuant to 31.205-6(f) or awards made in recognition of employee achievements pursuant…
  • FAR 31.205-15 Fines, penalties, and mischarging costs.
    …he 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 contrac…
  • FAR 31.205-18 Independent research and development and bid and proposal costs.
    …Deferred IR&D costs. (1) IR&D costs that were incurred in previous accounting periods are unallowable, except when a contractor has developed a specific product at its own risk in anticipation of recovering the development costs in the sale…
  • FAR 31.205-19 Insurance and indemnification.
    …st of comparable purchased insurance plus associated insurance administration expenses is unallowable. (4) Self-insurance charges for risks of catastrophic losses are unallowable (see 28.308(e)). (d) Purchased insurance costs are allowabl…
  • FAR 31.205-27 Organization costs.
    …ership of a business, and (3) raising capital (net worth plus long-term liabilities), are unallowable. Such expenditures include but are not limited to incorporation fees and costs of attorneys, accountants, brokers, promoters and organizer…
  • FAR 31.205-33 Professional and consultant service costs.
    …ofessional and consultant services performed under any of the following circumstances are unallowable: (1) Services to improperly obtain, distribute, or use information or data protected by law or regulation (e.g., 52.215-1(e), Restriction…
  • FAR 31.205-46 Travel costs.
    …of the lowest priced airfare available to the contractor during normal business hours are unallowable except when such accommodations require circuitous routing, require travel during unreasonable hours, excessively prolong travel, result i…
  • FAR 42.709-2 General.
    …alties apply to contracts covered by this section: (1) If the indirect cost is expressly unallowable under a cost principle in the FAR, or an executive agency supplement to the FAR, that defines the allowability of specific selected costs,…
  • FAR 42.709-3 Responsibilities.
    …te coordination of remedies, if there is evidence that the contractor knowingly submitted unallowable costs. (b) The contract auditor, in the review and/or the determination of final indirect cost proposals for contracts subject to this se…
  • DFARS 228.370-2 General.
    …graph (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 …
  • FAR 31.105 Construction and architect-engineer contracts.
    …uipment (see subdivisions (d)(2)(i)(B) and (C) of this section). However, costs otherwise unallowable under this part shall not become allowable through the use of any schedule (see 31.109(c)). For example, schedules need to be adjusted for…
  • FAR 31.205-1 Public relations and advertising costs.
    …oning, and roll-out ceremonies, to the extent specifically provided for by contract. (f) Unallowable public relations and advertising costs include the following: (1) All public relations and advertising costs, other than those specified …
  • FAR 31.205-17 Idle facilities and idle capacity costs.
    … that 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 …
  • FAR 31.205-20 Interest and other financial costs.
    …nnection with preparing prospectuses, and costs of preparing and issuing stock rights are unallowable (but see 31.205-28). However, interest assessed by State or local taxing authorities under the conditions specified in 31.205-41(a)(3) is …
  • FAR 31.205-30 Patent costs.
    …than those for general counseling services, patent costs not required by the contract are unallowable. (See also 31.205-37.)
  • FAR 31.205-31 Plant reconversion costs.
    …the 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 specia…
  • FAR 31.205-34 Recruitment costs.
    …ncies, not in excess of standard commercial rates. (b) Help-wanted advertising costs are unallowable if the advertising— (1) Does not describe specific positions or classes of positions; or (2) Includes material that is not relevant for …
  • FAR 31.205-38 Selling costs.
    …5. 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 c…
  • FAR 31.205-42 Termination costs.
    …e to the negligent or willful failure of the contractor to discontinue the costs shall be unallowable. (c) Initial costs. Initial costs, including starting load and preparatory costs, are allowable as follows: (1) Starting load costs not …
  • FAR 31.205-48 Research and development costs.
    …ice of a contract or amount of a grant for research and development effort, the excess is unallowable under any other Government contract.
  • FAR 31.205-51 Costs of alcoholic beverages.
    Costs of alcoholic beverages are unallowable.
  • FAR 42.704 Billing rates.
    …l indirect cost rates anticipated for the contractor's fiscal period, as adjusted for any unallowable costs. When the contracting officer (or cognizant Federal agency official) or auditor determines that the dollar value of contracts requir…
  • FAR 42.801 Notice of intent to disallow costs.
    …ontractor 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 …
  • FAR 52.242-4 Certification of Final Indirect Costs.
    …st rates will apply; and 2. This proposal does not include any costs which are expressly unallowable under applicable cost principles of the FAR or its supplements. (End of clause)
  • DFARS 231.205-1 Public relations and advertising costs.
    …25.7303-2(e) for allowability provisions affecting foreign military sales contracts. (f) Unallowable public relations and advertising costs also include monies paid to the Government associated with the leasing of Government equipment, inc…

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.