Subpart D: Post-award requirements 2024 Uniform Guidance · effective Oct 1, 2024

2 CFR 200.324: Contract cost and price

2 CFR 200.324 sets 3 requirements for organizations that receive federal grants and cooperative agreements. Applies while you manage a federal award.

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What 2 CFR 200.324 requires

1. Allowable costs

What you must do

Perform a cost or price analysis for every procurement transaction, including contract modifications, in excess of the simplified acquisition threshold; the method and degree of analysis depend on the facts (including considering potential workforce impacts where the transaction will displace public sector employees); as a starting point, make independent estimates before receiving bids or proposals.

When it applies

Any contract or contract modification above the SAT (FAR-based per 2 CFR 200.1; historically $250,000 — confirm current value at 48 CFR 2.101).

Budget justification
2. Allowable costs

What you must do

Costs or prices based on estimated costs for contracts under the Federal award are allowable only to the extent that costs incurred or cost estimates included in negotiated prices would be allowable under subpart E (cost principles); the entity may reference its own cost principles only if they comply with subpart E.

When it applies

Negotiated or cost-based contract pricing under the award (e.g., cost-reimbursement contracts resulting from the proposals method).

BudgetBudget justification
3. Procurement

What you must do

Do not use the 'cost plus a percentage of cost' or 'percentage of construction costs' methods of contracting.

When it applies

Any proposed contract pricing structure under the award.

Budget justificationConstruction plan
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Sections 2 CFR 200.324 refers to

Regulation text of 2 CFR 200.324

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(a) The recipient or subrecipient must perform a cost or price analysis for every procurement transaction, including contract modifications, in excess of the simplified acquisition threshold. The method and degree of analysis conducted depend on the facts surrounding the particular procurement transaction. For example, the recipient or subrecipient should consider potential workforce impacts in their analysis if the procurement transaction will displace public sector employees. However, as a starting point, the recipient or subrecipient must make independent estimates before receiving bids or proposals.

(b) Costs or prices based on estimated costs for contracts under the Federal award are allowable only to the extent that the costs incurred or cost estimates included in negotiated prices would be allowable for the recipient or subrecipient under subpart E of this part. The recipient or subrecipient may reference its own cost principles as long as they comply with subpart E of this part.

(c) The recipient or subrecipient must not use the “cost plus a percentage of cost” and “percentage of construction costs” methods of contracting.

Source: eCFR · checked Sep 17, 2026

Questions about 2 CFR 200.324

What does 2 CFR 200.324 require?

Perform a cost or price analysis for every procurement transaction, including contract modifications, in excess of the simplified acquisition threshold; the method and degree of analysis depend on the facts (including considering potential workforce impacts where the transaction will displace public sector employees); as a starting point, make independent estimates before receiving bids or proposals. Costs or prices based on estimated costs for contracts under the Federal award are allowable only to the extent that costs incurred or cost estimates included in negotiated prices would be allowable under subpart E (cost principles); the entity may reference its own cost principles only if they comply with subpart E. Do not use the 'cost plus a percentage of cost' or 'percentage of construction costs' methods of contracting.

When does 2 CFR 200.324 apply?

Any contract or contract modification above the SAT (FAR-based per 2 CFR 200.1; historically $250,000 — confirm current value at 48 CFR 2.101). Negotiated or cost-based contract pricing under the award (e.g., cost-reimbursement contracts resulting from the proposals method). Any proposed contract pricing structure under the award.

Plain-English summaries for information only, not legal advice. Always check the regulation text, your award terms and your agency’s guidance.