31.703
Requirements
Contracts with nonprofits must follow the OMB Uniform Guidance for cost allowability, and agencies cannot impose extra restrictions except for costs made unallowable by law.
Overview
FAR 31.703 outlines the requirements for determining the allowability of costs under contracts with nonprofit organizations. It specifies that contracts referencing Subpart 31.7 must use the OMB Uniform Guidance (2 CFR part 200, subpart E and appendix IV) as the standard for cost allowability, as determined by the contracting officer and based on the guidance in effect at the time of contract award. The section also clarifies that agencies should not impose additional restrictions on individual cost items beyond those already established, but certain costs identified in FAR 31.603(b) remain unallowable by statute.
Key Rules
- Reference to OMB Uniform Guidance
- Contracts must use the OMB Uniform Guidance (2 CFR part 200, subpart E and appendix IV) to determine cost allowability, as interpreted by the contracting officer.
- No Additional Agency Restrictions
- Agencies should not add further restrictions on individual cost items beyond those in the Uniform Guidance, except for costs specifically made unallowable by law (referenced in 31.603(b)).
Responsibilities
- Contracting Officers: Must determine cost allowability in accordance with the OMB Uniform Guidance in effect at contract award.
- Contractors: Must comply with the OMB Uniform Guidance for cost allowability and avoid claiming costs deemed unallowable by statute.
- Agencies: Should avoid imposing extra restrictions on cost items, except as required by law.
Practical Implications
- This section ensures consistency in cost allowability for nonprofit contracts by referencing a single federal standard (OMB Uniform Guidance).
- Contractors must stay current with the applicable version of the Uniform Guidance and be aware of statutory unallowable costs.
- Common pitfalls include misunderstanding which version of the Uniform Guidance applies and inadvertently claiming unallowable costs.