FAC Number: 2022-08
Effective Date: 09/23/2022

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;

      (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.

Far Parts