35.003 Policy
Source: FAR 35.003 on acquisition.gov
Use contracts for direct government benefit in R&D, and follow agency and FAR procedures for cost sharing and recoupment.
Overview
FAR 35.003 outlines the policy for using contracts in research and development (R&D) activities, emphasizing that contracts should only be used when the primary goal is to acquire supplies or services for the direct benefit of the federal government. If the main intent is to stimulate or support R&D for a broader public purpose, grants or cooperative agreements are more appropriate. The section also addresses cost sharing and recoupment, directing contracting professionals to follow specific FAR references and agency procedures unless otherwise required by law.
Key Rules
- Use of Contracts
- Contracts are appropriate only when the federal government is the direct beneficiary of the supplies or services acquired.
- Use of Grants or Cooperative Agreements
- Grants or cooperative agreements should be used when the purpose is to stimulate or support R&D for public benefit, not direct government use.
- Cost Sharing
- Cost sharing requirements must align with FAR 16.303, 42.707(a), and agency-specific procedures unless mandated by law.
- Recoupment
- Recoupment practices not required by law must follow agency procedures.
Responsibilities
- Contracting Officers: Must determine the appropriate funding instrument (contract, grant, or cooperative agreement) based on the principal purpose, and ensure cost sharing and recoupment comply with referenced FAR sections and agency rules.
- Contractors: Should understand the distinctions between contracts, grants, and cooperative agreements, and comply with cost sharing and recoupment requirements as specified in their contracts.
- Agencies: Must establish and enforce procedures for cost sharing and recoupment, and provide guidance on selecting the correct funding instrument.
Practical Implications
- This section ensures that the correct legal instrument is used for R&D activities, which affects compliance, oversight, and funding mechanisms.
- Misclassification of the funding instrument can lead to compliance issues and potential audit findings.
- Contractors should be aware of cost sharing and recoupment obligations, as these can impact project budgeting and financial management.
(a) Use of contracts. Contracts shall be used only when the principal purpose is the acquisition of supplies or services for the direct benefit or use of the Federal Government. Grants or cooperative agreements should be used when the principal purpose of the transaction is to stimulate or support research and development for another public purpose.
(b) Cost sharing. Cost sharing policies (which are not otherwise required by law) under Government contracts shall be in accordance with 16.303, 42.707(a) and agency procedures.
(c) Recoupment. Recoupment not otherwise required by law shall be in accordance with agency procedures.