35.001 Definitions
Source: FAR 35.001 on acquisition.gov
FAR 35.001 defines key R&D terms—applied research, development, and recoupment—that directly impact cost allowability and contract compliance in research and development contracting.
Overview
FAR 35.001 provides definitions for key terms used in Part 35, which governs research and development (R&D) contracting. Understanding these definitions is essential for correctly interpreting requirements and ensuring compliance in R&D contracts. The section clarifies distinctions between applied research, development, and recoupment, which impact cost allowability, contract type selection, and government rights in technology or product sales.
Key Rules
- Applied Research
- Refers to efforts that build on basic research to advance technology or scientific knowledge, but excludes work aimed at designing or testing specific products for sale.
- Development
- Involves systematic activities to design, develop, test, or evaluate new or improved products or services to meet specific objectives, including prototyping and engineering testing.
- Recoupment
- Describes the government's right to recover nonrecurring costs when contractors sell, lease, or license government-funded products or technology to non-federal buyers.
Responsibilities
- Contracting Officers: Must apply these definitions when drafting, negotiating, and administering R&D contracts.
- Contractors: Should use these definitions to determine cost allowability, contract scope, and reporting obligations.
- Agencies: Ensure consistent application of definitions in R&D procurement and oversight.
Practical Implications
- These definitions help distinguish between research, development, and commercialization activities, affecting cost principles and contract clauses.
- Misclassification can lead to disputes over allowable costs or government rights.
- Contractors should carefully align project descriptions and cost proposals with these definitions to avoid compliance issues.
Applied research means the effort that (a) normally follows basic research, but may not be severable from the related basic research; (b) attempts to determine and exploit the potential of scientific discoveries or improvements in technology, materials, processes, methods, devices, or techniques; and (c) attempts to advance the state of the art. When being used by contractors in cost principle applications, this term does not include efforts whose principal aim is the design, development, or testing of specific items or services to be considered for sale; these efforts are within the definition of "development," given below.
Development, as used in this part, means the systematic use of scientific and technical knowledge in the design, development, testing, or evaluation of a potential new product or service (or of an improvement in an existing product or service) to meet specific performance requirements or objectives. It includes the functions of design engineering, prototyping, and engineering testing; it excludes subcontracted technical effort that is for the sole purpose of developing an additional source for an existing product.
Recoupment, as used in this part, means the recovery by the Government of Government-funded nonrecurring costs from contractors that sell, lease, or license the resulting products or technology to buyers other than the Federal Government.