Why Part 42 Matters

Effective contract administration drives contract outcomes. DCMA administers thousands of contracts and its oversight functions — including progress payment approvals, property administration, and quality assurance — directly affect contractor operations. Indirect cost rate negotiations under Subpart 42.7 determine final contract costs for flexibly-priced contracts. CPARS evaluations under Subpart 42.15 directly affect a contractor's ability to win future work, as past performance is a mandatory evaluation factor.

Key Topics in Part 42

FAR Part 42 addresses several critical areas of the federal acquisition process. Understanding these topics is essential for both contracting officers and contractors working within this regulatory framework.

• Contract administration office assignment and functions (Subpart 42.3)
• DCMA and administrative contracting officer roles
• Indirect cost rate administration (Subpart 42.7)
• DCAA audit and incurred cost submissions
• Contractor performance assessment — CPARS (Subpart 42.15)
• Novation and change-of-name agreements (Subpart 42.12)
• Stop-work orders (Subpart 42.13)
• Postaward orientation and conferences

How FAR Part 42 Applies

The Federal Acquisition Regulation is organized into 53 parts, each covering a distinct area of the procurement process. Part 42 (Contract Administration and Audit Services) is part of this framework and works in conjunction with other FAR parts to create a comprehensive regulatory structure. Contracting officers must comply with all applicable parts when executing procurement actions, and contractors must understand the requirements that flow from these regulations into their contracts.

The requirements in Part 42 may be implemented through specific contract clauses prescribed in FAR Part 52. When a clause references Part 42, the substantive requirements originate here, while Part 52 provides the actual clause language incorporated into contracts and solicitations.

Subparts

FAR Part 42 is divided into 17 subparts, each addressing a specific aspect of contract administration and audit services.

• 42.1 — Contract Audit Services
• 42.2 — Contract Administration Services
• 42.3 — Contract Administration Office Functions
• 42.4 — Correspondence and Visits
• 42.5 — Postaward Orientation
• 42.6 — Corporate Administrative Contracting Officer
• 42.7 — Indirect Cost Rates
• 42.8 — Disallowance of Costs
• 42.9 — Bankruptcy
• 42.10 — Subpart 42.10 [Reserved]
• 42.11 — Production Surveillance and Reporting
• 42.12 — Novation and Change-of-Name Agreements
• 42.13 — Suspension of Work, Stop-Work Orders, and Government Delay of Work
• 42.14 — Subpart 42.14 [Reserved]
• 42.15 — Contractor Performance Information
• 42.16 — Small Business Contract Administration
• 42.17 — Forward Pricing Rate Agreements

Reading FAR Part 42

The full text of FAR Part 42 is available on the Electronic Code of Federal Regulations (eCFR). The eCFR provides the most current version of the regulation, including any recent amendments published through Federal Acquisition Circulars (FACs). For historical versions, use the eCFR's point-in-time search feature.

• What does FAR Part 42 cover?

  FAR Part 42 covers contract administration and audit services within the federal acquisition process. FAR Part 42 covers contract administration and audit services, including the assignment of contract administration to Defense Contract Management Agency (DCMA) or other contract administration offices (CAOs). Subpart 42.3 addresses contract administration office functions. Subpart 42.7 covers indirect cost rate administration including the establishment of billing rates, final indirect cost rates, and the incurred cost audit process. Subpart 42.15 addresses contractor performance information and the Contractor Performance Assessment Reporting System (CPARS).

• Who must comply with FAR Part 42?

  FAR Part 42 applies to all executive branch agencies conducting acquisitions, unless a specific exemption exists. Contractors must comply with the requirements that are incorporated into their contracts through prescribed clauses from FAR Part 52. Agency-specific supplements (DFARS, GSAM, etc.) may add additional requirements beyond the base FAR.

• Where can I read the full text of FAR Part 42?

  The full text is available on the Electronic Code of Federal Regulations (eCFR). You can also access it through acquisition.gov, which is maintained by the General Services Administration. Both sources reflect the most current version of the regulation.

• How does FAR Part 42 relate to contract clauses?

  FAR Part 42 establishes the substantive policies and procedures. The actual clause language that gets incorporated into contracts is found in FAR Part 52. Each clause in Part 52 includes a "prescription" that references the relevant policy part, creating a direct link between the requirement and its implementation in the contract.