FAR 31.301—Purpose.
Plain-English Summary
FAR 31.301 states the purpose of the subpart that governs how to determine the cost of research and development, training, and other work performed by educational institutions under Government contracts. In practical terms, it tells contracting officers, auditors, and contractors that this subpart is the cost-principles framework for educational institutions, not a general pricing rule for all contractors. The section is important because educational institutions often have unique accounting structures, indirect cost practices, and mission-driven activities that differ from commercial firms, so the Government needs a specific set of principles to evaluate allowable costs consistently. It covers three broad subject areas: research and development, training, and other work performed by educational institutions. The purpose is to establish the basis for determining what costs are appropriate, allocable, and acceptable when the Government pays for work performed by colleges, universities, and similar institutions under contracts. In practice, this section signals that the detailed rules in the subpart must be used whenever the contract involves these types of institutional activities.
Key Rules
Applies to educational institutions
This subpart is specifically directed to work performed by educational institutions under Government contracts. It is not a general cost-principles statement for all contractors, but a specialized framework for institutions such as colleges and universities.
Covers research and development
The subpart provides principles for determining the cost of research and development work performed by educational institutions. This means R&D-related charges must be evaluated under the rules in this subpart rather than by ad hoc judgment.
Covers training activities
The subpart also addresses the cost of training performed by educational institutions under Government contracts. Training costs must therefore be assessed using the principles established for this category of institutional work.
Covers other institutional work
In addition to R&D and training, the subpart applies to other work performed by educational institutions under contracts with the Government. This ensures the cost principles are broad enough to cover non-R&D, non-training institutional performance when contracted for by the Government.
Establishes cost-determination principles
The section’s purpose is to provide the governing principles for determining cost, which means it sets the framework for evaluating how costs are identified, measured, and treated for Government contract purposes.
Responsibilities
Contracting Officer
Use this subpart as the governing framework when evaluating contract costs for educational institutions performing research, training, or other work. Ensure the applicable cost principles are identified and applied consistently in contract administration and pricing.
Educational Institution
Apply the subpart’s principles when developing, accumulating, and presenting costs for Government contract work involving research and development, training, or other covered activities. Maintain accounting and cost records that support the Government’s cost determination.
Auditor / Cost Analyst
Review claimed or proposed costs against the principles in this subpart when examining educational institution contracts. Verify that the institution’s cost treatment aligns with the applicable rules for the covered work.
Government Program Office
Recognize that contracts with educational institutions may require specialized cost treatment and coordinate with contracting personnel to ensure the correct principles are used for the work being procured.
Practical Implications
This section is a roadmap: it tells users where to look for the rules that govern educational institution costs, especially for R&D and training work.
A common pitfall is treating an educational institution like a commercial contractor and applying the wrong cost framework; this subpart exists to avoid that mistake.
Contracting officers should confirm early whether the work is research, training, or other institutional work so the correct cost principles are used from the start.
Educational institutions should expect their accounting and proposal systems to support cost determinations under specialized Government rules, not just internal academic budgeting.
Because the section is only a purpose statement, users must read the rest of the subpart for the actual allowability and allocation rules; this provision alone does not authorize or disallow specific costs.
Official Regulatory Text
This subpart provides the principles for determining the cost of research and development, training, and other work performed by educational institutions under contracts with the Government.