Is FAR 52.242-4, Certification of final I/D Costs a required contract clause for third party contracts?
(5) Is FAR 42.7 a required contract clause in FTA’s 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. The problem arises because FAR Part 31- Contract Cost Principles and Procedures, as the title implies, contains both cost principles as well administrative procedures. The common grant rule and the FTA Circular bot
