[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: 48CFR31.201-4]

[Page 575-576]
 
            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. 31.201-4  Determining allocability.

    A cost is allocable if it is assignable or chargeable to one or more 
cost objectives on the basis of relative benefits received or other 
equitable relationship. Subject to the foregoing, a cost is allocable to 
a Government contract if it--
    (a) Is incurred specifically for the contract;

[[Page 576]]

    (b) Benefits both the contract and other work, and can be 
distributed to them in reasonable proportion to the benefits received; 
or
    (c) Is necessary to the overall operation of the business, although 
a direct relationship to any particular cost objective cannot be shown.