DC

Direct Costs are expenses that can be specifically identified with a particular contract, project, or cost objective. DCs include direct labor, direct materials, subcontracts, travel, and other costs incurred solely for contract performance.

Understanding DC identification and allocation is fundamental to government contract pricing and accounting. FAR cost principles govern DC allowability and allocability. Proper DC classification affects indirect rate calculations and overall contract profitability. DCAA reviews DC treatment during audits and proposal evaluations.