What does allowable cost typically exclude?

Allowable costs, in the context of government contracting and federal acquisition, refer to expenses that a contractor is permitted to charge to a government contract as they are necessary and reasonable for contract performance. However, there are specific exclusions to what constitutes an allowable cost.

The definition makes it clear that allowable costs typically exclude any costs related to unallowable expenses. These unallowable expenses are explicitly identified in the contract itself and are not reimbursable. This means that any costs categorized as unallowable cannot be charged against the contract amount and are therefore excluded from the allowable costs.

Understanding this distinction is crucial for contractors and Contracting Officer Representatives (CORs), as it emphasizes the need to comply with contract specifications and the Federal Acquisition Regulation (FAR) when determining what costs can be billed.

Therefore, costs that are deemed unallowable based on the guidelines provided in contracts are the correct answer to what allowable costs typically exclude. This reinforces the importance of careful cost tracking and adherence to contractual limitations in government contracting.