31.104
Contracts with educational institutions
FAR 31.104 mandates that cost-reimbursement contracts with educational institutions must incorporate FAR 31.3 cost principles, ensuring consistent and compliant cost determination and negotiation.
Overview
FAR 31.104 addresses the application of cost principles to contracts with educational institutions, including research and development, training, and other work. It defines educational institutions as those recognized under the OMB Uniform Guidance and relevant U.S. Code. The section requires contracting officers to incorporate the cost principles from FAR subpart 31.3 by reference in cost-reimbursement contracts with educational institutions. These principles guide the determination of reimbursable costs, negotiation of indirect cost rates, and settlement of costs for terminated contracts. For fixed-price contracts and termination settlements, these cost principles serve as a guide for evaluating costs during negotiations.
Key Rules
- Incorporation of Cost Principles (31.3)
- Cost-reimbursement contracts with educational institutions must reference FAR subpart 31.3 for determining allowable costs, negotiating indirect rates, and settling terminated contracts.
- Application to Fixed-Price Contracts
- The same cost principles are used as a guide for evaluating costs in fixed-price contract negotiations and termination settlements.
Responsibilities
- Contracting Officers: Must ensure FAR 31.3 cost principles are referenced in cost-reimbursement contracts with educational institutions and use them as a guide for fixed-price contracts.
- Contractors (Educational Institutions): Must comply with the cost principles in FAR 31.3 for cost-reimbursement contracts and be prepared to justify costs during negotiations and settlements.
- Agencies: Oversee compliance and ensure proper application of cost principles in contracts with educational institutions.
Practical Implications
- Ensures consistency and fairness in cost determination for educational institutions.
- Impacts how indirect cost rates are negotiated and how costs are settled in terminations.
- Common pitfalls include failing to reference the correct cost principles or misapplying them in negotiations.