When does FAR 31.205-33 apply?

Is the contractor charging outside professional or consulting fees to flexibly-priced government work? If yes, 31.205-33 governs. The consultant's deliverables, the written agreement, and the reasonableness of the fee all become evidence. Is there a written agreement that defines scope, deliverables, and fee structure? A written agreement is foundational. Verbal arrangements or backdated agreements are heavily discounted by DCAA and ASBCA panels. Can the contractor produce work product or contemporaneous evidence of services performed? If not, the cost is at risk regardless of the agreement. Retainers without deliverables or status evidence are routinely held unallowable.

What are the most common contractor pitfalls under FAR 31.205-33?

Contingent fees tied to contract award: Fees that are contingent on the contractor's success in obtaining a government contract collide with 31.205-1 (selling), 31.205-22 (lobbying), or the FAR 3.4 covenant against contingent fees. They are commonly held unallowable and can carry False Claims Act exposure if certified to. Retainer-only arrangements with no deliverables: A monthly retainer paid to a consultant with no documented deliverables, status reports, or meeting records does not satisfy the work-product factor. The cost is at risk year over year. Professional services that are functionally lobbying: Government-relations consultants who are paid to influence legislation, regulations, or specific procurement decisions provide costs that are unallowable under 31.205-22, regardless of how the engagement is labeled. Related-party consulting at above-market rates: When the consultant is a related party (officer's spouse, family member, controlled entity), the reasonableness test is applied with extra scrutiny. Above-market rates without documented justification are routinely disallowed.

What audit-flag patterns are associated with FAR 31.205-33?

Auditors and contracting officers commonly flag: Consultant invoices with no description of services or deliverables; Retainer payments continuing month over month with no work-product evidence; Professional service fees concentrated in months immediately before contract award decisions; Related-party consulting arrangements without documented arms-length analysis; Consultant scopes that include legislative or regulatory advocacy; Hourly rates significantly above local market norms with no qualifications justification.

FAR

FAR 31.205-33 — Professional and consultant service costs

Governs allowability of fees paid to outside professional and consultant service providers (legal, accounting, technical advisory). Requires written agreements, work-product evidence, and reasonableness of fees.

Citation: 48 C.F.R. § 31.205-33 · Live text on acquisition.gov · eCFR

What this clause does

FAR 31.205-33 addresses costs paid for professional and consultant services rendered by persons who are members of a particular profession or possess a special skill, and who are not employees of the contractor. These costs are allowable only when they meet specific factors that distinguish bona fide consulting from contingency fee arrangements, retainers without work product, and disguised business-development spend.

The section enumerates factors used to determine allowability. Among them: the nature and scope of the service (must be reasonably related to the contractor's business and the contract), the necessity of contracting for the service (capability not available in-house), the past pattern of contractor consulting expenditures, the qualifications of the consultant, the amount of the fee in relation to customary fees, the adequacy of the contractual agreement (written, with deliverables and evidence), and the work product or evidence of services performed.

Unallowability is common in three patterns. First, retainers without contemporaneous work product. Second, contingent fees connected to obtaining government contracts (which collide with FAR 3.4 covenant against contingent fees and 31.205-1). Third, professional services that are essentially lobbying, which fall under 31.205-22 and are unallowable.

Does this clause apply to my contract?

Three tests resolve applicability. Read each in order; the first "no" usually means the clause does not flow.

1.Is the contractor charging outside professional or consulting fees to flexibly-priced government work?
If yes, 31.205-33 governs. The consultant's deliverables, the written agreement, and the reasonableness of the fee all become evidence.
2.Is there a written agreement that defines scope, deliverables, and fee structure?
A written agreement is foundational. Verbal arrangements or backdated agreements are heavily discounted by DCAA and ASBCA panels.
3.Can the contractor produce work product or contemporaneous evidence of services performed?
If not, the cost is at risk regardless of the agreement. Retainers without deliverables or status evidence are routinely held unallowable.

Common contractor pitfalls

Patterns that produce questioned costs, back-wage liability, or False Claims Act exposure under this clause.

Contingent fees tied to contract award
Fees that are contingent on the contractor's success in obtaining a government contract collide with 31.205-1 (selling), 31.205-22 (lobbying), or the FAR 3.4 covenant against contingent fees. They are commonly held unallowable and can carry False Claims Act exposure if certified to.
Retainer-only arrangements with no deliverables
A monthly retainer paid to a consultant with no documented deliverables, status reports, or meeting records does not satisfy the work-product factor. The cost is at risk year over year.
Professional services that are functionally lobbying
Government-relations consultants who are paid to influence legislation, regulations, or specific procurement decisions provide costs that are unallowable under 31.205-22, regardless of how the engagement is labeled.
Related-party consulting at above-market rates
When the consultant is a related party (officer's spouse, family member, controlled entity), the reasonableness test is applied with extra scrutiny. Above-market rates without documented justification are routinely disallowed.

Audit-flag patterns

Specific signals that contracting officers, DCAA, and agency IGs use to surface noncompliance.

Consultant invoices with no description of services or deliverables
Retainer payments continuing month over month with no work-product evidence
Professional service fees concentrated in months immediately before contract award decisions
Related-party consulting arrangements without documented arms-length analysis
Consultant scopes that include legislative or regulatory advocacy
Hourly rates significantly above local market norms with no qualifications justification

How FieldLedger helps

FieldLedger's DCAA Compliance toolkit attaches consultant agreements, deliverables, and invoices to the cost objective at the time of payment. Retainer-vs-deliverable accounting is visible in monthly reviews, so the documentation gap surfaces before DCAA finds it.

DCAA compliance →Indirect Rate Engine →DCAA readiness check →

Related clauses

Clauses that flow alongside or interact with FAR 31.205-33.

Frequently asked

What does FAR 31.205-33 require?: Governs allowability of fees paid to outside professional and consultant service providers (legal, accounting, technical advisory). Requires written agreements, work-product evidence, and reasonableness of fees.
When does FAR 31.205-33 apply?: Is the contractor charging outside professional or consulting fees to flexibly-priced government work? If yes, 31.205-33 governs. The consultant's deliverables, the written agreement, and the reasonableness of the fee all become evidence. Is there a written agreement that defines scope, deliverables, and fee structure? A written agreement is foundational. Verbal arrangements or backdated agreements are heavily discounted by DCAA and ASBCA panels. Can the contractor produce work product or contemporaneous evidence of services performed? If not, the cost is at risk regardless of the agreement. Retainers without deliverables or status evidence are routinely held unallowable.
What are the most common contractor pitfalls under FAR 31.205-33?: Contingent fees tied to contract award: Fees that are contingent on the contractor's success in obtaining a government contract collide with 31.205-1 (selling), 31.205-22 (lobbying), or the FAR 3.4 covenant against contingent fees. They are commonly held unallowable and can carry False Claims Act exposure if certified to. Retainer-only arrangements with no deliverables: A monthly retainer paid to a consultant with no documented deliverables, status reports, or meeting records does not satisfy the work-product factor. The cost is at risk year over year. Professional services that are functionally lobbying: Government-relations consultants who are paid to influence legislation, regulations, or specific procurement decisions provide costs that are unallowable under 31.205-22, regardless of how the engagement is labeled. Related-party consulting at above-market rates: When the consultant is a related party (officer's spouse, family member, controlled entity), the reasonableness test is applied with extra scrutiny. Above-market rates without documented justification are routinely disallowed.
What audit-flag patterns are associated with FAR 31.205-33?: Auditors and contracting officers commonly flag: Consultant invoices with no description of services or deliverables; Retainer payments continuing month over month with no work-product evidence; Professional service fees concentrated in months immediately before contract award decisions; Related-party consulting arrangements without documented arms-length analysis; Consultant scopes that include legislative or regulatory advocacy; Hourly rates significantly above local market norms with no qualifications justification.
How does FieldLedger help with FAR 31.205-33?: FieldLedger's DCAA Compliance toolkit attaches consultant agreements, deliverables, and invoices to the cost objective at the time of payment. Retainer-vs-deliverable accounting is visible in monthly reviews, so the documentation gap surfaces before DCAA finds it.

Sources

FAR clause text — acquisition.gov/far/31.205-33
Live regulatory text — eCFR (Title 48)
DCAA Contract Audit Manual — dcaa.mil/Guidance/CAM
Plain-English methodology — FieldLedger methodology

Snapshot date: 2026-05-08. Clause text is binding only as of the version incorporated into your specific contract — check acquisition.gov for the live regulatory text.