Part 42 Contract Administration and Audit Services
Source: FAR 42 on acquisition.gov
FAR Part 42 provides the framework for effective contract administration and audit services, ensuring compliance and accountability throughout the federal contracting process.
Overview
FAR Part 42 establishes the policies and procedures for contract administration and audit services in federal contracting. It covers the assignment and execution of contract administration, audit responsibilities, correspondence, postaward orientation, indirect cost rates, disallowance of costs, bankruptcy procedures, production surveillance, novation and change-of-name agreements, suspension and stop-work orders, contractor performance information, small business contract administration, and forward pricing rate agreements. The part is organized into subparts that address specific aspects of contract administration, ensuring that both government agencies and contractors understand their roles, responsibilities, and compliance obligations throughout the contract lifecycle.
Key Rules
- Contract Audit Services
- Outlines responsibilities and procedures for contract audits, including assignment and directories.
- Contract Administration Services
- Details the assignment and execution of contract administration functions and responsibilities.
- Indirect Cost Rates
- Provides policies for establishing, billing, and finalizing indirect cost rates, including penalties for unallowable costs.
- Postaward Orientation and Correspondence
- Sets procedures for postaward conferences, correspondence, and visits to contractor facilities.
- Special Situations
- Addresses bankruptcy, novation, change-of-name agreements, suspension of work, and stop-work orders.
- Performance and Reporting
- Establishes requirements for contractor performance information and production surveillance.
Responsibilities
- Contracting Officers: Assign and oversee contract administration and audit services, ensure compliance with indirect cost and performance reporting requirements, and manage special contract situations.
- Contractors: Comply with audit requests, provide required cost and performance information, participate in postaward activities, and adhere to contract modifications and reporting.
- Agencies: Monitor contract administration, maintain oversight of audit and performance data, and ensure proper handling of novation, bankruptcy, and other special cases.
Practical Implications
- FAR Part 42 ensures contracts are properly administered and audited, reducing risk and ensuring compliance.
- It impacts daily operations by defining how audits, cost rates, and performance evaluations are handled.
- Common pitfalls include failing to provide timely information, misunderstanding indirect cost requirements, or mishandling contract modifications and special situations.
42.002 Interagency agreements.
42.003 Cognizant Federal agency.
Subpart 42.1 - Contract Audit Services
42.101 Contract audit responsibilities.
42.102 Assignment of contract audit services.
42.103 Contract audit services directory.
Subpart 42.2 - Contract Administration Services
42.201 Contract administration responsibilities.
42.202 Assignment of contract administration.
42.203 Contract administration services directory.
Subpart 42.3 - Contract Administration Office Functions
42.302 Contract administration functions.
Subpart 42.4 - Correspondence and Visits
42.401 Contract correspondence.
42.402 Visits to contractors’ facilities.
42.403 Evaluation of contract administration offices.
Subpart 42.5 - Postaward Orientation
42.502 Selecting contracts for postaward orientation.
42.503-1 Postaward conference arrangements.
42.503-2 Postaward conference procedure.
42.503-3 Postaward conference report.
42.505 Postaward subcontractor conferences.
Subpart 42.6 - Corporate Administrative Contracting Officer
42.602 Assignment and location.
Subpart 42.7 - Indirect Cost Rates
42.703-2 Certificate of indirect costs.
42.705 Final indirect cost rates.
42.705-1 Contracting officer determination procedure.
42.705-2 Auditor determination procedure.
42.705-3 Educational institutions.
42.705-4 State and local governments.
42.705-5 Nonprofit organizations other than educational and state and local governments.
42.706 Distribution of documents.
42.707 Cost-sharing rates and limitations on indirect cost rates.
42.708 Quick-closeout procedure.
42.709 Penalties for Unallowable Costs.
42.709-4 Assessing the penalty.
42.709-6 Waiver of the penalty.
Subpart 42.8 - Disallowance of Costs
42.801 Notice of intent to disallow costs.
42.803 Disallowing costs after incurrence.
42.903 Solicitation provision and contract clause.
Subpart 42.11 - Production Surveillance and Reporting
42.1104 Surveillance requirements.
42.1105 Assignment of criticality designator.
42.1106 Reporting requirements.
Subpart 42.12 - Novation and Change-of-Name Agreements
42.1202 Responsibility for executing agreements.
42.1203 Processing agreements.
42.1204 Applicability of novation agreements.
42.1205 Agreement to recognize contractor’s change of name.
Subpart 42.13 - Suspension of Work, Stop-Work Orders, and Government Delay of Work
42.1304 Government delay of work.
Subpart 42.15 - Contractor Performance Information
Subpart 42.16 - Small Business Contract Administration