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FAR and DFARS › FAR Part 42: Contract Administration and Audit Services › Subpart 42.7

FAR 42.705-4 State and local governments.

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 states that the OMB Uniform Guidance at 2 CFR part 200, subpart E and appendix V establishes the cognizant agency concept and procedures for determining a cognizant agency to approve indirect costs for state and local governments. It also says that indirect cost rates negotiated and approved by the cognizant agency for indirect costs must be used by all Federal agencies that award contracts to those same state and local governments.

Applies to: State and local governments that receive Federal contracts and have indirect costs associated with federally-funded programs and activities.

What it requires

  • Use indirect cost rates negotiated and approved by the cognizant agency for indirect costs.

Key terms: OMB Uniform Guidance · 2 CFR part 200, subpart E and appendix V · cognizant agency · indirect cost rates · state and local governments

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

The text

The OMB Uniform Guidance at 2 CFR part 200, subpart E and appendix V, concerning cost principles for state and local governments (see Subpart 31.6) establishes the cognizant agency concept and the procedures for determining a cognizant agency for approving State and local government indirect costs associated with federally-funded programs and activities. The indirect cost rates negotiated and approved by the cognizant agency for indirect costs will be used by all Federal agencies that also award contracts to these same State and local governments.

Sections that refer to it

  • 42.705-1 Contracting officer determination procedure.

← 42.705-3 Educational institutions. · 42.705-5 Nonprofit organizations other than educational and state and local governments. →

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 42.705-4 State and local governments · SpendQuery