FAR Part 42 Defines Post-Award Administration, Audit, and Performance Rules

FAR Part 42 supplies the federal framework for administering and auditing procurement contracts after award. Its scope, stated in FAR 42.000, is to prescribe “policies and procedures for assigning and performing contract administration and contract audit services.” The part covers a broad set of post-award functions, including contract audit and administration services, postaward orientation, indirect cost rates, disallowance of costs, novations, stop-work orders, production surveillance, and contractor performance information. It applies to federal procurement contracts—not grants or cooperative agreements—so research offices and contractors should first confirm the instrument is a contract before relying on Part 42 requirements.

Responsibility is divided among the contracting officer at the buying agency, a contract administration office (CAO) that may perform delegated functions, and government audit personnel. The contracting officer retains the contractual relationship, but a CAO may be assigned specific administration duties. That division matters operationally: contractors need to know which office handles matters such as surveillance, payment-related administration, or other delegated actions, and which decisions remain with the contracting agency. FAR Part 42 also addresses audit services; for contractors other than educational institutions and nonprofit organizations, FAR 42.101(b) identifies the Defense Contract Audit Agency (DCAA) as the responsible government audit agency.

Indirect-cost cognizance is a significant point of distinction. Under the current FAR text described by the source, the cognizant federal agency is generally the agency with the “largest dollar amount of negotiated contracts.” That default does not apply to educational institutions and nonprofit organizations. Their indirect-cost cognizance is directed instead to 2 CFR Part 200, including Appendices III and IV under the current text cited in the source. The source also notes that the FAR overhaul text checked on October 29, 2026 points to 2 CFR Part 200 for these organizations and says the cognizant agency “should remain” in place for at least five years. Contractors and research administrators should verify which FAR text applies to their contract and avoid applying the commercial-contractor default to universities or nonprofits.

Performance evaluation procedures create another actionable compliance obligation. FAR Part 42 includes contractor performance information, and the source highlights a 14-calendar-day CPARS comment period for responding to performance evaluations. Contractors should establish an internal process to route evaluations promptly, collect evidence, and submit comments within the applicable period. More broadly, Part 42 is organized across subparts covering contract audit services (42.1), contract administration services (42.2), CAO functions (42.3), correspondence and visits (42.4), postaward orientation (42.5), corporate administrative contracting officers (42.6), indirect cost rates (42.7), disallowance of costs (42.8), bankruptcy (42.9), production surveillance and reporting (42.11), novation and change-of-name agreements (42.12), suspension and stop-work matters (42.13), contractor performance information (42.15), small business contract administration (42.16), and forward pricing rate agreements (42.17). Subparts 42.10 and 42.14 are reserved. This structure makes Part 42 a practical reference for identifying post-award responsibilities, not simply an audit rulebook.

• Confirm the instrument type: FAR Part 42 governs federal procurement contracts, not grants or cooperative agreements.
• Map administration responsibilities: Review contract terms and delegation documents to identify the responsible CAO and duties retained by the contracting agency.
• Identify the audit agency: DCAA is identified in FAR 42.101(b) as the responsible government audit agency for contractors other than educational institutions and nonprofit organizations.
• Use the right cognizance test: The largest-dollar negotiated-contract test generally applies outside the educational and nonprofit categories.
• Apply 2 CFR Part 200: Universities and nonprofits should assess indirect-cost cognizance under 2 CFR Part 200, including Appendices III and IV, rather than assume the default FAR test applies.
• Check the applicable FAR version: The source compares current FAR text with FAR overhaul text checked October 29, 2026; verify the version governing the specific contract.
• Protect the CPARS response window: Track the 14-calendar-day comment period and route evaluations quickly for review and supporting evidence.
• Use the full Part 42 structure: Relevant topics include indirect cost rates, cost disallowances, novations, stop-work orders, production surveillance, performance information, and forward pricing rate agreements.