2 CFR Part 220

Cost Principles for Educational Institutions (OMB Circular A-21)

2 CFR Part 220 replaces the OMB Circular A-21. This Part speaks to the purpose, scope, policy, and other issues relevant to cost principles. Program directors and fiscal officers will refer to this title when determining costs applicable to grants, contracts, and other agreements with educational institutions.


220.5 Purpose.
220.10 Scope.
220.15 Policy.
220.20 Applicability.
220.25 OMB responsibilities.
220.30 Federal agency responsibilities.
220.35 Effective date of changes.
220.40 Relationship to previous issuance.
220.45 Information contact.

Table of Contents
Exhibit A

Sec. 220.5  Purpose.

This part establishes principles for determining costs applicable to grants, contracts, and other agreements with educational institutions.

Sec. 220.10  Scope.

The principles in this part deal with the subject of cost determination, and make no attempt to identify the circumstances or dictate the extent of agency and institutional participation in the financing of a particular project. Provision for profit or other increment above cost is outside the scope of this part.

Sec. 220.15  Policy.

The principles in this part are designed to provide that the Federal Government bear its fair share of total costs, determined in accordance with generally accepted accounting principles, except where restricted or prohibited by law. Agencies are not expected to place additional restrictions on individual items of cost. The successful application of cost accounting principles requires development of mutual understanding between representatives of educational institutions and of the Federal Government as to their scope, implementation, and interpretation.

Sec. 220.20  Applicability.

(a) All Federal agencies that sponsor research and development, training, and other work at educational institutions shall apply the provisions of Appendix A to this part in determining the costs incurred for such work. The principles shall also be used as a guide in the pricing of fixed price or lump sum agreements.

(b) Each federal agency that awards defense-related contracts to a Federally Funded Research and Development Center (FFRDC) associated with an educational institution shall require the FFRDC to comply with the Cost Accounting Standards and with the rules and regulations issued by the Cost Accounting Standards Board and set forth in 47 CFR part 99.

Sec. 220.25  OMB responsibilities.

OMB is responsible for:

(a) Issuing and maintaining the guidance in this part.

(b) Interpreting the policy requirements in this part and providing assistance to ensure effective and efficient implementation.

(c) Granting any deviations to Federal agencies from the guidance in this part, as provided in Appendix A to this part. Exceptions will only be made in particular cases where adequate justification is presented.

(d) Conducting broad oversight of government-wide compliance with the guidance in this part.

Sec. 220.30  Federal Agency responsibilities.

The head of each Federal agency that awards and administers grants and agreements subject to this part is responsible for requesting approval from and/or consulting with OMB (as applicable) for deviations from the guidance in Appendix A to this part and performing the applicable functions specified in Appendix A to this part.

Sec. 220.35  Effective date for changes.

Institutions as of the start of their first fiscal year beginning after that date shall implement the provisions. Earlier implementation, or a delay in implementation of individual provisions, is permitted by mutual agreement between an institution and the cognizant Federal agency.

Sec. 220.40  Relationship to previous issuance.

(a) The guidance in this part previously was issued as OMB Circular A-21. Designations of the attachment to the Circular and the appendices to that attachment have changed, as shown in the following table:

2 CFR Part 220. Cost Principles for Cost Principles for Educational Institutions (OMB Circular A-21). 2006. English.

Last Reviewed: April 2008

Last Updated: August 6, 2015