Subpart 31.6
Contracts with State, Local, and Federally Recognized Indian Tribal Governments
FAR Subpart 31.6 requires state, local, and tribal government contractors to follow federal cost principles, ensuring costs are reasonable, allocable, and properly documented.
Overview
FAR Subpart 31.6 establishes the cost principles and procedures applicable to contracts with state, local, and federally recognized Indian tribal governments. It outlines the purpose, general rules, and specific requirements for determining the allowability of costs under such contracts. This subpart ensures that costs claimed by these governmental entities are reasonable, allocable, and consistent with federal regulations, primarily referencing the principles set forth in the Office of Management and Budget (OMB) Circular A-87 (now codified at 2 CFR Part 200, Subpart E). The subpart provides guidance to both contracting officers and contractors on how to apply these cost principles during contract administration and audit processes.
Key Rules
- Purpose (31.601)
- Defines the intent to establish uniform cost principles for contracts with state, local, and tribal governments.
- General (31.602)
- States that the cost principles in OMB Circular A-87 (2 CFR Part 200, Subpart E) apply to these contracts unless otherwise specified.
- Requirements (31.603)
- Details the specific requirements for cost allowability, including documentation, reasonableness, and consistency with federal guidelines.
Responsibilities
- Contracting Officers: Must ensure that contracts with these governmental entities comply with applicable cost principles and review cost submissions for allowability and allocability.
- Contractors (State, Local, Tribal Governments): Must follow federal cost principles, maintain adequate documentation, and submit costs that are reasonable and allocable.
- Agencies: Oversee compliance, conduct audits, and provide guidance on cost allowability.
Practical Implications
- This subpart exists to ensure federal funds are spent appropriately and consistently across contracts with governmental entities.
- It impacts daily contracting by requiring strict adherence to federal cost principles and thorough documentation.
- Common pitfalls include insufficient documentation, misunderstanding of allowable costs, and failure to follow OMB guidance.