Costs Not Covered by a FAR Cost Principle | PNWC’s Government Contracting Update

The cost principles in FAR (Federal Acquisition Regulations) Part 31 do not cover every element of cost that may be incurred by a Government contractor. The absence of coverage of a particular cost category however does not mean the cost are automatically allowable, or even unallowable. Remember, a cost must also be reasonable and allocable to the contract and it must also comply with contract terms. There are a lot of situations where the Government will cap certain costs by inserting provisions in the contract. For example, DOE (Energy) likes to cap executive compensation and many Agencies will cap the amount of overtime that can be charged to their contract(s).

Source: PNWC’s Government Contracting Update: Costs Not Covered by a FAR Cost Principle