Unallowable/Unallocable Costs

FAR Reference
(see Part 31)
Unallowable/Unallocable Costs
31.205-1 Advertising Costs - "Advertising"means the use of media to promote the sale of products and/or serves.
31.205-3 Bad Debts Costs - Losses arising from uncollectible accounts receivable and other claims, and any directly associated costs such as collection and legal costs.
31.205-6 Compensation for Personal Services - The reasonableness of executive compensation, any individual element or the sum of individual elements, may be challenged. Where such challenges occur, the business concern must demonstrate the reasonableness of compensation items in question.
31.205-7 Contingencies - Contingency costs are costs associated with a possible future event or condition, the outcome of which is undeterminable.
31.205-8 Contributions or Donations - Such costs include cash, property or services, and are unallowable regardless of recipient.
31.205-14 Entertainment Costs - Costs of social activities (office parties, picnics, etc.) and any directly associated costs (tickets to shows or sporting events, meals, lodging, gratuities, etc.).
31.205-15 Fines and Penalties - Such costs result from violations of, or failure to comply with, Federal, State, local or foreign laws. Such costs would be allowable if incurred to comply with specific terms and conditions of the contract.
31.205-19 Insurance Costs - Costs of insurance on the lives of officers, partners, or sole proprietors where the contracting organization is the beneficiary.
31.205-20 Interest and Other Financial Costs - Include interest on borrowings however represented, costs of refinancing capital, fees paid in connection with preparing prospectuses, issuing stock rights, etc.
31.205-22 Legislative Lobbying Costs - These costs are almost always unallowable.  Contractor/grantee must  maintain adequate records to demonstrate that  the certification of costs as being allowable or unallowable (see 42.703-2) complies with the requirements of 31.205-22.
31.205-27 Organization Costs - Include expenditures associated with planning or executing the organization or reorganization of the corporate structure of the business, or raising capital.
31.205-30 Patent Costs - Unallowable except for general counseling services on patent matters, and patent costs required by the terms of the Government contract or grant.
31.205-35 Relocation Costs - Costs associated with relocating an employee who resigns within twelve (12) months for reasons within the employee's control.
31.205-37 Royalty Costs - Such costs include royalties paid where the Government has royalty free use of the patent, or in cases where the patent is invalid, unenforceable, or expired.
31.205-41 Taxes - Such costs include Federal income and excess profit taxes and taxes associated with financing, refinancing, or reorganizations.
31.205-46 Travel Costs - Costs for meals, lodging and incidental expenses which exceed maximum amounts on a daily basis which apply to travel by Federal employees in the performance of Government business.
Costs of contractor-owned or leased automobiles are allowable if reasonable and to the extent they are used for company business. That portion of the cost of company-furnished automobiles that relates to personal use by employees (including transportation to and from work) is considered compensation to the employee and is unallowable in accordance with 31.205-6(m)(2).

 

31.205-51 Alcoholic Beverage Costs - Costs of alcoholic beverages are unallowable.
   
Last Modified On: Dec 14, 2017