FAR 42.3—Subpart 42.3

General.

FAR 42.301 explains the basic rule for contract administration when a contract has been assigned to a contract administration office (CAO) under FAR subpart 42.2. It tells the CAO what sources control its administration work: the FAR itself (48 CFR Chapter 1), the specific contract terms, and, by default, the servicing agency’s own regulations. It also points to an exception when the agencies have entered into an interagency agreement under FAR 42.002 that says something different. In practice, this section matters because it establishes the hierarchy of authorities the CAO must follow when performing post-award administration functions such as monitoring performance, processing changes, and carrying out other administrative duties delegated to the servicing office. For contractors, it clarifies that the administering office may apply both FAR requirements and agency-specific procedures, so the rules they encounter may depend on which agency is servicing the contract. For contracting officers and agencies, it is a reminder that interagency administration arrangements should be clear about which regulations govern to avoid conflicting instructions and inconsistent administration.

Contract administration functions.

FAR 42.302 is the core list of contract administration functions that a contracting officer normally delegates to a contract administration office (CAO), such as a contract administration office or administrative contracting officer (ACO). It explains which post-award duties may be shifted away from the contracting officer and which duties are reserved or limited, including compensation and insurance reviews, post-award orientation, proposal review support, forward pricing rate agreements, advance agreements on cost treatment, cost allowability and disallowance actions, final indirect cost and billing rates, disputes support, Cost Accounting Standards (CAS) determinations, accounting system adequacy, progress and performance-based payments, contract payments, special bank accounts, cost overrun/underrun monitoring, financial condition monitoring, limitation on payments analysis, tax exemption and duty-free entry processing, industrial security for classified contracts, work requests, spare parts/provisioning actions, terminations and cancellation charges, novation and name changes, property administration, contractor inventory disposal, Government property requests and use, production surveillance, preaward surveys, priorities and allocations assistance, and labor relations monitoring. In practice, this section defines the post-award administrative workload and shows who has authority to act on behalf of the Government for each function. It matters because improper delegation can invalidate actions, create payment or pricing errors, or cause disputes over who had authority to decide an issue. It also tells contractors which Government office will handle routine administration, property, billing, and compliance matters after award. The section is especially important in cost-reimbursement, CAS-covered, classified, and property-heavy contracts, where administration decisions can directly affect price, payments, schedule, and compliance.