Contracts with State, local, and federally recognized Indian tribal governments
Subpart 31.6 cost principles must be used for contracts with State, local, and federally recognized Indian tribal governments unless specifically excluded or an OMB-approved exception applies.
Overview
FAR 31.107 establishes that Subpart 31.6 contains the cost principles and standards for contracts with State, local, and federally recognized Indian tribal governments. These principles are designed to ensure a uniform and efficient approach to determining allowable costs, fostering better relationships between these governments and federal agencies. The section clarifies that these rules apply to all contracts with such entities, except for contracts with publicly financed educational institutions (covered by Subpart 31.3) and publicly owned hospitals or medical care providers (covered by requirements from their sponsoring agencies). Any other exceptions to these rules require approval from the Office of Management and Budget (OMB) with adequate justification.
Key Rules
- Application of Subpart 31.6
- Cost principles in Subpart 31.6 apply to contracts with State, local, and federally recognized Indian tribal governments, except as noted.
- Exclusions
- Contracts with publicly financed educational institutions and publicly owned hospitals/medical providers are excluded and governed by other specific requirements.
- Exceptions Process
- Any other exceptions must be approved by OMB upon presentation of adequate justification.
Responsibilities
- Contracting Officers: Must apply Subpart 31.6 cost principles to relevant contracts and identify when exclusions or exceptions apply.
- Contractors (State, local, tribal governments): Must comply with Subpart 31.6 unless specifically excluded or granted an OMB exception.
- Agencies: Must seek OMB approval for exceptions and ensure proper application of cost principles.
Practical Implications
- This section ensures consistency in cost determination for contracts with government entities, reducing disputes and administrative burden.
- Contractors and contracting officers must be aware of the correct cost principles and any applicable exclusions or exceptions.
- Failure to apply the correct standards can result in disallowed costs or contract disputes.