FAR 31.100—Scope of subpart.
Plain-English Summary
FAR 31.100 is a scope statement for FAR Part 31, Subpart 31.1, and it tells readers what this subpart is about before they get into the detailed cost principles that follow. It covers two main topics: first, the applicability of the cost principles and related procedures in the succeeding subparts of FAR Part 31 to different types of contracts and subcontracts; and second, the role and need for advance agreements. In practice, this section matters because it signals that cost allowability rules are not automatically the same for every contract type or every subcontract, and that parties may need to negotiate advance agreements to reduce uncertainty about how certain costs will be treated. For contracting officers, it is a reminder to determine whether the Part 31 cost principles apply and whether an advance agreement is appropriate. For contractors and subcontractors, it highlights the need to understand which costs may be allowable, allocable, and reasonable under the applicable contract structure, and to seek clarity in advance when treatment of a cost could be disputed later.
Key Rules
Defines subpart scope
This section does not itself set detailed cost allowability rules; instead, it explains that the succeeding subparts of FAR Part 31 contain the applicable cost principles and procedures. Its function is to frame where those rules apply and to orient the reader to the rest of the part.
Applies to contracts and subcontracts
The subpart addresses how the cost principles and procedures apply to various types of contracts and subcontracts. That means users must look beyond the general rule and determine whether the specific contract or subcontract falls within the reach of the later cost principles.
Points to succeeding subparts
The section makes clear that the operative rules are found in the later subparts of FAR Part 31, not in this scope provision itself. This helps prevent misreading the scope statement as a substantive cost rule.
Highlights advance agreements
The section expressly notes the need for advance agreements. These agreements are used when the parties want to establish in advance how certain costs or cost issues will be treated, reducing later disputes and audit findings.
Responsibilities
Contracting Officer
Determine whether the FAR Part 31 cost principles and procedures apply to the contract or subcontract at issue, and consider whether an advance agreement is needed to clarify treatment of specific costs or cost issues.
Contractor
Identify which cost principles apply to its contract or subcontract, evaluate whether uncertain or sensitive cost items should be addressed through an advance agreement, and ensure proposed costs are consistent with the applicable rules.
Subcontractor
Understand whether the relevant FAR Part 31 cost principles flow down to the subcontract and, where applicable, coordinate with the prime contractor on any advance agreement or cost treatment issue that needs advance clarification.
Agency
Ensure acquisition personnel apply the correct Part 31 cost principles to covered contracts and support consistent use of advance agreements where they are needed to manage cost treatment risk.
Practical Implications
This section is a roadmap, not a detailed rule set, so users must read the later subparts of FAR Part 31 to know the actual cost principles.
A common pitfall is assuming all contracts and subcontracts are treated the same; applicability depends on the contract type and the governing cost principles.
Advance agreements can prevent disputes over cost allowability, but they must be addressed early enough to be useful and should be specific about the cost issue being resolved.
Contractors should flag unusual, recurring, or potentially controversial costs before incurring them, rather than waiting for an audit or invoice review.
Contracting officers should use this scope section as a prompt to confirm coverage and document any advance agreement decisions that affect cost treatment.
Official Regulatory Text
This subpart describes the applicability of the cost principles and procedures in succeeding subparts of this part to various types of contracts and subcontracts. It also describes the need for advance agreements.