Overview
FAR 31.100 establishes the foundational scope for Subpart 31.1, detailing how federal cost principles apply across various contract types and introducing the concept of advance agreements for cost determination.
Key Rules
- Applicability: Sets the framework for applying the cost principles and procedures found in the subsequent subparts of FAR Part 31.
- Contract Coverage: Explicitly covers both prime contracts and subcontracts.
- Advance Agreements: Identifies and emphasizes the requirement and utility of negotiating advance agreements to clarify the treatment of specific costs.
Practical Implications
- Compliance Mapping: Contractors must reference this subpart to determine if their specific contract vehicle (e.g., cost-reimbursement, fixed-price) is subject to FAR Part 31 cost principles.
- Risk Mitigation: By highlighting advance agreements, the section encourages proactive negotiation to avoid future disputes and audit disallowances regarding complex or unique cost items.