Is FAR 42.7 a required contract clause in FTAs Circular 4220.1F, Third party Contracting Guidelines?
A. FTA Circular 4220.1F requires that allowable costs under third-party contracts be determined in accordance with “Federal cost principles.” Federal cost principles are defined by the FAR in Part 31 – Contract Cost Principles and Procedures. The Circular requirement is based on the common grant rule in 49 CFR § 18.22 – Allowable Costs. 49 CFR § 18.22 (b) – Applicable Cost Principles states that “For each kind or organization, there is a set of Federal principles for determining allowable costs.” It goes on to prescribe the cost principles in 48 CFR Part 31 (FAR) as applying to for-profit organizations other than hospitals. This would cover grantee third-party contracts.
Related Questions
- A contracting agency has entered into a contract to lease real property to a private party. Does the owner of the property have to provide proof of a BRC?
- Is FAR 52.242-4, Certification of final I/D Costs a required contract clause for third party contracts?
- What systems should be covered by a third party maintenance contract?
