31.100
Scope of subpart
FAR 31.100 sets the stage for applying cost principles and emphasizes the importance of advance agreements to clarify cost treatment in government contracts.
Overview
FAR 31.100 outlines the scope of Subpart 31.1, clarifying that it addresses when and how the cost principles and procedures in later subparts of Part 31 apply to different types of contracts and subcontracts. It also introduces the concept of advance agreements, which are arrangements made in advance between the government and contractors regarding the treatment of specific costs. This section serves as a gateway, helping contracting professionals determine which cost principles are relevant to their contracts and when advance agreements may be necessary.
Key Rules
- Applicability of Cost Principles
- Explains that the cost principles and procedures in subsequent subparts apply to various contract and subcontract types.
- Advance Agreements
- Highlights the importance of establishing advance agreements to clarify the treatment of certain costs before contract performance.
Responsibilities
- Contracting Officers: Must determine and communicate which cost principles apply to each contract or subcontract and consider the need for advance agreements.
- Contractors: Should understand which cost principles apply to their contracts and proactively seek advance agreements for ambiguous or disputed costs.
- Agencies: Oversee compliance with applicable cost principles and ensure advance agreements are documented when necessary.
Practical Implications
- This section exists to help both government and contractors identify the relevant cost rules for their contracts, reducing disputes and confusion.
- It impacts daily contracting by requiring careful review of contract types and the potential need for advance agreements.
- Common pitfalls include failing to identify the correct cost principles or neglecting to establish advance agreements for complex cost issues.