31.205-8
Contributions or donations
Contributions or donations are generally unallowable costs on government contracts, except as specifically provided in FAR 31.205-1(e)(3).
Overview
FAR 31.205-8 establishes that costs associated with contributions or donations—whether in the form of cash, property, or services—are generally unallowable for reimbursement under government contracts. This rule applies regardless of the recipient of the contribution or donation. The only exception is as specified in FAR 31.205-1(e)(3), which should be consulted for any potential allowable circumstances. The intent is to prevent contractors from charging the government for charitable or philanthropic expenses that do not directly benefit contract performance.
Key Rules
- General Unallowability
- Contributions or donations are not allowable costs on government contracts.
- Exception Reference
- The only exception is as provided in FAR 31.205-1(e)(3), which should be reviewed for specific allowable cases.
Responsibilities
- Contracting Officers: Must ensure that claimed costs do not include unallowable contributions or donations.
- Contractors: Must exclude all contributions or donations from cost submissions unless specifically allowed under the referenced exception.
- Agencies: Should review cost proposals and incurred cost submissions for compliance with this rule.
Practical Implications
- This rule exists to ensure government funds are used strictly for contract-related expenses, not for charitable giving.
- Contractors must carefully review their cost accounting practices to avoid including unallowable contributions or donations.
- Common pitfalls include inadvertently including charitable sponsorships, donations, or in-kind contributions as allowable costs.