Common Unallowable Costs: Practical Guidance for AE Firms

Understanding unallowable costs under FAR Part 31 is essential for AE firms performing work for a State DOT. While the regulatory language can feel technical, the practical application does not have to be.

In this lunch-and-learn program, Stambaugh Ness government contracting experts Tony Machi and Kellianne Mayer will provide attendees with a clear, focused overview of common unallowable and expressly unallowable costs that most frequently affect small architecture and engineering firms.

The session will walk through key FAR Part 31 cost principles and discuss how they apply to everyday business expenses such as marketing, travel, meals, bonuses, advertising, and other indirect costs. Using practical examples, participants will gain clarity on how these costs affect overhead rate calculations and financial reporting. The goal is to build confidence and provide straightforward guidance that firms can use immediately within their accounting practices.

Learning Objectives

• Summarize the key FAR Part 31 cost principles that govern allowability for AE firms.
• Identify common unallowable and expressly unallowable costs under FAR Part 31 that most frequently affect small architecture and engineering firms performing State DOT work.
• Apply FAR Part 31 cost principles to everyday business expenses, including marketing, travel, meals, bonuses, and advertising, to determine proper treatment in overhead calculations and financial reporting.