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FAR 31.205 is the “Selected costs” section of Federal Acquisition Regulation Subpart 31.2. It holds the individual cost principles, one numbered section per cost type, that say how a given kind of cost is treated on a covered contract. This guide maps the section, shows what it deliberately leaves out, and gives a reading order you can reuse. Everything below is as described on acquisition.gov on 2026-10-29; the site now presents Part 31 with FAR Overhaul framing, so check which text your contract incorporates before relying on a paragraph.
What FAR 31.205 is and who runs it
The FAR is the government-wide acquisition rulebook, published on acquisition.gov. Part 31 sets the contract cost principles and procedures. Section 31.205 sits in Subpart 31.2 and is numbered 31.205-1 through 31.205-52. Six of those numbers are marked [Reserved] (-2, -5, -9, -24, -45 and -50), so the section contains 46 active cost principles.
It is a map of selected costs, not a complete list. FAR 31.204(d) says that section 31.205 does not cover every element of cost, and that failure to include an item does not imply that it is either allowable or unallowable. A cost that has no entry of its own is judged against the general principles in the rest of Part 31, not assumed to be fine.
When FAR 31.205 applies
31.205 is not a funding program and has no eligibility test. It matters when your contract incorporates the Part 31 cost principles. Whether your award uses Part 31 or a different framework depends on its clauses and on the kind of organization you are. For universities and other grant recipients the comparison is usually with the Uniform Guidance; see FAR Part 31 vs. 2 CFR 200 for how the two sets of cost principles differ in scope, and the dictionary entry FAR Part 31 (Contract Cost Principles and Procedures) for the definition.
What the section covers: the full map
The active principles, by section number as listed on acquisition.gov:
- -1 Public relations and advertising; -3 Bad debts; -4 Bonding; -6 Compensation for personal services; -7 Contingencies; -8 Contributions or donations
- -10 Cost of money; -11 Depreciation; -12 Economic planning; -13 Employee morale, health, welfare, food service, and dormitory costs and credits; -14 Entertainment; -15 Fines, penalties, and mischarging
- -16 Gains and losses on disposition or impairment of depreciable property or other capital assets; -17 Idle facilities and idle capacity; -18 Independent research and development and bid and proposal; -19 Insurance and indemnification; -20 Interest and other financial; -21 Labor relations; -22 Lobbying and political activity; -23 Losses on other contracts
- -25 Manufacturing and production engineering; -26 Material; -27 Organization; -28 Other business expenses; -29 Plant protection; -30 Patent; -31 Plant reconversion; -32 Precontract; -33 Professional and consultant service; -34 Recruitment; -35 Relocation; -36 Rental; -37 Royalties and other costs for use of patents
- -38 Selling; -39 Service and warranty; -40 Special tooling and special test equipment; -41 Taxes; -42 Termination; -43 Trade, business, technical, and professional activity; -44 Training and education; -46 Travel; -47 Costs related to legal and other proceedings; -48 Research and development; -49 Goodwill; -51 Costs of alcoholic beverages; -52 Asset valuations resulting from business combinations
The title is the only thing the list above asserts. Whether a given cost is allowable, allowable with conditions or unallowable is stated in the body of each principle, not in its title, so read the section itself.
Three principles research organizations meet often
31.205-18: independent research and development and bid and proposal
The text defines bid and proposal (B&P) costs as “the costs incurred in preparing, submitting, and supporting bids and proposals”. Independent research and development (IR&D) means projects falling within four areas: basic research, applied research, development, and systems and other concept formulation studies. Paragraph (c) says that, except as provided in paragraphs (d) and (e) or in agency regulations, IR&D and B&P costs are allowable as indirect expenses on contracts to the extent they are allocable and reasonable. The B&P definition excludes the costs of effort sponsored by a grant or cooperative agreement, and the IR&D definition excludes effort sponsored by a grant. For how this plays out in an indirect-rate build-up, see indirect cost rate mechanics for SBIR contractors.
31.205-14: entertainment
Costs of amusement, diversions and social activities are unallowable, together with directly associated costs such as tickets to shows or sports events, meals, lodging, rentals, transportation and gratuities. Membership in social, dining or country clubs or similar organizations is also unallowable, regardless of whether the cost is reported as taxable income to the employee. The principle states that costs made specifically unallowable under it are not allowable under any other cost principle, so re-labelling the same spend under, say, a training or morale heading does not rescue it.
31.205-1: public relations and advertising
This is its own principle with its own conditions; do not fold it into -14 or -43 because the spend looks similar. Read -1 directly when a communications or outreach cost appears on a cost-type contract.
How to read it: a four-step procedure
- Confirm the framework. Find which cost-principle clause your award invokes (Part 31 or 2 CFR 200). If it is not Part 31, 31.205 is background, not your rule. The 2 CFR 200 Subpart E guide covers the Uniform Guidance side.
- Find the specific principle. Match the cost to the -N section by title. Read the whole section, including its paragraphs on exceptions and on directly associated costs.
- Check the cross-references. Some principles refer onward (31.205-18, for example, defers to paragraphs (d) and (e) and to agency regulations); follow those references rather than reasoning from the title alone.
- If nothing fits, go to 31.204(d). An unlisted cost is not automatically allowable or unallowable; it is tested against the general rules in the rest of Part 31.
Typical phases where 31.205 comes into play
These are phases, not deadlines, and the timing depends on the contract: proposal pricing, when estimated costs and indirect rates are built; performance, when costs are recorded and charged; rate settlement, when the cost-allowability review happens (see the incurred cost submission guide); and closeout or termination, where principle -42 applies.
Common mistakes
- Reading silence as permission. 31.204(d) says omission from 31.205 implies neither allowability nor unallowability.
- Judging by title. Principle titles name a cost type; the allowability rule is in the body.
- Relabelling an unallowable cost. Where a principle says a cost is not allowable under any other principle (as -14 does), a different heading does not change the result.
- Mixing frameworks. Applying a Part 31 principle to an award governed by 2 CFR 200, or the reverse, answers the wrong question. Consistency in how costs are treated across contracts is a separate topic, covered in Cost Accounting Standards and DS-2 consistency.
Related frameworks
| Topic | Where it is covered on CASRAI |
|---|---|
| Part 31 against the Uniform Guidance cost principles | FAR Part 31 vs. 2 CFR 200 |
| Federal grant cost principles (2 CFR 200 Subpart E) | 2 CFR 200 Subpart E guide |
| The overall Uniform Guidance framework | Uniform Guidance (2 CFR 200) |
| Cost accounting consistency | CAS and DS-2 consistency |
FAQ
How many sections are in FAR 31.205?
The numbering runs from 31.205-1 to 31.205-52, which is 52 numbers. Six are [Reserved], leaving 46 active principles.
If a cost is not listed in 31.205, is it allowable?
Not automatically. FAR 31.204(d) states that failure to include an item does not imply that it is either allowable or unallowable.
Are IR&D and bid and proposal costs allowable?
Under 31.205-18(c), they are allowable as indirect expenses on contracts to the extent they are allocable and reasonable, subject to the exceptions in paragraphs (d) and (e) and to agency regulations.
Are entertainment costs ever allowable under another principle?
31.205-14 says costs made specifically unallowable under it are not allowable under any other cost principle.
Sources
- FAR 31.205 Selected costs, acquisition.gov, checked 2026-10-29.
- FAR 31.205-14 Entertainment costs, acquisition.gov, checked 2026-10-29.
- FAR 31.205-18 Independent research and development and bid and proposal costs, acquisition.gov, checked 2026-10-29.
- FAR Overhaul, Part 31, acquisition.gov, checked 2026-10-29 (source of the 31.204(d) wording).
