Overview
This section establishes that the allowability of costs for nonprofit organizations is governed by the OMB Uniform Guidance (2 CFR part 200), specifically subpart E and appendix IV. It also identifies specific statutory prohibitions that override or supplement that guidance.
Key Rules
- Incorporation of OMB Uniform Guidance: Contracts citing Subpart 31.7 must use 2 CFR part 200, subpart E and appendix IV to determine cost allowability.
- Effective Date: The specific version of the OMB Uniform Guidance in effect on the date of the contract award is the governing version for that contract.
- Restriction on Agencies: Federal agencies are generally discouraged from imposing additional restrictions on individual cost items beyond what is established in the guidance.
- Statutory Exclusions: Despite the general reliance on OMB guidance, costs identified as unallowable under 10 U.S.C. 3744 and 41 U.S.C. 4304 (such as those related to legal proceedings or lobbying) remain unallowable.
Practical Implications
- Nonprofit contractors must ensure their accounting systems and cost-allocation methodologies are compliant with 2 CFR 200 rather than the commercial cost principles found in FAR 31.2.
- Contracting officers and auditors must perform a dual-check to ensure costs are allowable under the Uniform Guidance while also screening for the specific statutory unallowables mandated by the FAR.