Overview
This section establishes that FAR Subpart 31.6 provides the standardized cost principles and standards for contracts with State, local, and federally recognized Indian tribal governments to ensure uniformity and efficiency.
Key Rules
- Primary Guidance: FAR Subpart 31.6 is the governing authority for determining allowable costs for these specific governmental entities.
- Applicability: These rules apply to all programs involving contracts with State, local, and tribal governments, with two specific exceptions:
- Educational Institutions: Publicly financed schools are governed by Subpart 31.3.
- Medical Providers: Publicly owned hospitals and medical care providers are subject to requirements from their sponsoring government agencies.
- OMB Oversight: The Office of Management and Budget (OMB) is the sole authority permitted to approve exceptions to these cost principles upon presentation of adequate justification.
Practical Implications
- Contracting officers and auditors must apply the specialized cost standards in Subpart 31.6 rather than general commercial cost principles when dealing with non-Federal government entities.
- Because different rules apply to public schools and hospitals, parties must carefully categorize the entity type at the outset of the contract to ensure the correct cost accounting standards are utilized.