Contracting Officer Warrant Board (COWB) Practice Test

Question: 1 / 400

When are costs considered "unallowable" in government contracts?

When they exceed projected budgets

When they do not comply with contract guidelines

Costs are considered "unallowable" in government contracts primarily when they do not comply with contract guidelines. This refers to specific regulations and criteria established in the Federal Acquisition Regulation (FAR) and the terms outlined in the contract itself. These guidelines dictate which types of costs can be charged to the government. Costs that do not meet these criteria, whether due to being specifically prohibited or not being necessary for the fulfillment of the contract, are deemed unallowable.

Understanding this framework is essential for contractors, as it ensures that they are only billing the government for costs that are permissible under the contract’s stipulations. Adhering to the correct guidelines helps maintain financial integrity and compliance with federal laws, which is critical for successful government contracting.

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When they relate to contractor overhead

When they arise from poor contractor performance

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