Many high profile cost issues are difficult to expedite either because some costs will not occur until future years (e.g. environmental and restructuring costs) or ACO determinations of unallowability may be appeals to appeals boards and/or courts. Historically, one method of dealing with this issue is to set aside the disputed costs from a contractor’s claim and roll these costs forward to a future year when their amount and allowability is conclusively determined. ACOs should coordinate the use of this technique with the Overhead Center.

The ACO will enter into an agreement with a contractor with the understanding that the roll forward will not result in any increased costs to the government. This should be implemented by the contractor agreeing that the actual overhead costs will be determined by applying the approximate government participation rate on flexibly-priced contracts for the year in which the contractor originally recorded the costs. The agreement should be limited to those contractors who have a continuing and consistent level of government business.

When a cost allowability determination is made, the costs should be allocated to the overhead year in which the costs were incurred. If that year is closed, the costs should be allocated to the open year closest tot the year the costs were incurred. The contractor should agree the actual overhead costs will
The DCMC Overhead Center wants to expedite determinations of CAS noncompliance and quickly negotiate settlements. It is urging ACOs to work closely with DCAA during their CAS compliance audits and stresses that timely settlement of CAS issues require ACOs to (1) ensure the audit considers all evidentiary data (2) a timely response from the contractor is obtained and (3) and negotiation of the issue are commenced as soon as possible. If agreement cannot be reached in a reasonable time (usually six months) the CAS issue will be referred to the Overhead Center for review and coordination. The Overhead Center is planning to issue a CAS guidebook once the CAS Board issues final amendments to CAS on "cost accounting practice changes" and the cost impact process.

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