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FAR and DFARS › FAR Part 42: Contract Administration and Audit Services

FAR 42.003 Cognizant Federal agency.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This section explains which Federal agency is the 'cognizant' agency for a contractor, generally the agency with the largest dollar amount of negotiated contracts including options. For educational institutions and nonprofit organizations, cognizance for indirect costs is set by the OMB Uniform Guidance. Once an agency assumes cognizance, it should normally remain for at least 5 years to ensure continuity, though it may transfer earlier if circumstances warrant and agencies agree.

Applies to: Federal agencies and contractors, including educational institutions and nonprofit organizations

What it requires

  • Once a Federal agency assumes cognizance for a contractor, it should remain cognizant for at least 5 years to ensure continuity and ease of administration.
  • If, at the end of the 5-year period, another agency has the largest dollar amount of negotiated contracts, including options, the two agencies shall coordinate and determine which will assume cognizance.

Key terms: cognizant Federal agency · negotiated contracts · options · educational institutions · nonprofit organizations

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

(a) For contractors other than educational institutions and nonprofit organizations, the cognizant Federal agency normally will be the agency with the largest dollar amount of negotiated contracts, including options. For educational institutions (defined as institutions of higher education in the OMB Uniform Guidance at 2 CFR part 200, subpart A, and 20 U.S.C. 1001) and nonprofit organizations (as defined in the OMB Uniform Guidance at 2 CFR part 200), the cognizant Federal agency for indirect costs is established according to the OMB Uniform Guidance at 2 CFR part 200, appendices III and IV, respectively.

(b) Once a Federal agency assumes cognizance for a contractor, it should remain cognizant for at least 5 years to ensure continuity and ease of administration. If, at the end of the 5-year period, another agency has the largest dollar amount of negotiated contracts, including options, the two agencies shall coordinate and determine which will assume cognizance. However, if circumstances warrant it and the affected agencies agree, cognizance may transfer prior to the expiration of the 5-year period.

Sections that refer to it

  • 42.202 Assignment of contract administration.

← 42.002 Interagency agreements. · 42.101 Contract audit responsibilities. →

Rule changes for FAR Part 42

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 42.003 Cognizant Federal agency · SpendQuery