Overview
FAR 31.702 establishes that the OMB Uniform Guidance (2 CFR part 200) serves as the regulatory framework for determining allowable costs for nonprofit organizations performing under federal contracts.
Key Rules
- Primary Authority: Cost determinations are governed by 2 CFR part 200, subpart E (Cost Principles) and appendix IV (Indirect Costs).
- Scope of Application: These principles apply to government contracts, grants, and other agreements with nonprofit entities.
- Definition: The term "nonprofit organization" is defined according to the criteria set forth in the OMB Uniform Guidance.
- Cross-Reference: Users must consult FAR 31.108 for specific exceptions where these nonprofit cost principles may not apply.
Practical Implications
- Nonprofit contractors must ensure their accounting systems and cost-allocation methodologies align with OMB Uniform Guidance rather than the standard FAR commercial cost principles.
- This alignment provides consistency for nonprofits that manage a portfolio of both federal grants and federal contracts, as the same cost principles generally apply to both.