[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR31.201-2]

[Page 575]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES--Table of Contents
 
          Subpart 31.2--Contracts With Commercial Organizations
 
Sec. 31.201-2  Determining allowability.

    (a) The factors to be considered in determining whether a cost is 
allowable include the following:
    (1) Reasonableness.
    (2) Allocability.
    (3) Standards promulgated by the CAS Board, if applicable; 
otherwise, generally accepted accounting principles and practices 
appropriate to the particular circumstances.
    (4) Terms of the contract.
    (5) Any limitations set forth in this subpart.
    (b) Certain cost principles in this subpart incorporate the 
measurement, assignment, and allocability rules of selected CAS and 
limit the allowability of costs to the amounts determined using the 
criteria in those selected standards. Only those CAS or portions of 
standards specifically made applicable by the cost principles in this 
subpart are mandatory unless the contract is CAS-covered (see 48 CFR 
9903). Business units that are not otherwise subject to these standards 
under a CAS clause are subject to the selected standards only for the 
purpose of determining allowability of costs on Government contracts. 
Including the selected standards in the cost principles does not subject 
the business unit to any other CAS rules and regulations. The 
applicability of the CAS rules and regulations is determined by the CAS 
clause, if any, in the contract and the requirements of the standards 
themselves.
    (c) When contractor accounting practices are inconsistent with this 
subpart 31.2, costs resulting from such inconsistent practices shall not 
be allowed in excess of the amount that would have resulted from using 
practices consistent with this subpart.
    (d) A contractor is responsible for accounting for costs 
appropriately and for maintaining records, including supporting 
documentation, adequate to demonstrate that costs claimed have been 
incurred, are allocable to the contract, and comply with applicable cost 
principles in this subpart and agency supplements. The contracting 
officer may disallow all or part of a claimed cost which is inadequately 
supported.

[48 FR 42301, Sept. 19, 1983, as amended at 57 FR 39590, Aug. 31, 1992; 
61 FR 31656, June 20, 1996]