Overview
This section establishes the specific cost principles used to determine the allowability of costs for contracts and subcontracts performed by State, local, and federally recognized Indian tribal governments.
Key Rules
- Applicability: Defines the scope of Subpart 31.6 as applying specifically to government entities (State, local, and tribal).
- Contractual Reach: The principles apply to both prime contracts and subcontracts involving these specific types of organizations.
- Regulatory Function: Acts as the foundational authority for determining which costs the government will reimburse or recognize during contract performance.
Practical Implications
- Contracting officers and auditors must apply these specific principles—which often align with OMB Uniform Guidance (2 CFR Part 200)—rather than the commercial cost principles found in FAR 31.2 when dealing with government-to-government contracting.
- Prime contractors must ensure they flow down the correct cost principles when subcontracting to state or local government agencies.