Air and Trade Show Costs

FAR 31.205-1(d)(2) states that the costs of activities to promote sales of products normally sold to the U.S. Government, which contain a significant effort to promote exports from the United States are allowable on contracts with the U.S. Government. Air and Trade shows may be an activity which is being used to promote export sales. As such, the determination is based on the activity of promoting export sales.

The other element that may make an airshow or trade show an allowable costs is if the event is for the dissemination of technical information. Cost incurred for the dissemination of technical information is an allowable costs.

If the air show does not meet either of the criteria above, the air show is an unallowable costs.

Air show costs may contain both unallowable and allowable expenses. For instance, exhibits, space for the exhibit, brochures, and the related expenses surrounding setting up the exhibit such as labor, freight, space rental, etc., would be allowable if it met one of the 2 criteria above. However, if the air show also contained entertainment expenses, hospitality suites, alochol, advertising, these costs would be unallowable, as well as associated costs such as labor.

Allowable Costs

Such costs that are not incurred in connection with a significant effort to promote export sales or disseminates technical information are unallowable.