Recent changes to cost accounting standards passed in the 2000 National Defense Acquisition Act have been made into final and interim rule changes in the FAR.  Final rule changes made to FAR Section 30 include:

FAR 9903.201-1 (CAS Applicability).  A new paragraph exempts contracts and subcontracts (we collectively refer to them as contracts) of less than $7.5 million from CAS coverage if, at the time of award, the business unit of the contractor or subcontractor is not currently performing a CAS-covered contract of $7.5 million or more.  Another provision exempts firm-fixed-price contracts from CAS coverage if they were awarded through adequate price competition without submission of cost or pricing data.

FAR 9903.201-2(a) (Full Coverage).  It is finalized to revise the dollar threshold for full CAS coverage from $25 million to $50 million and to delete the requirement that to be subject to full CAS coverage, a contractor or subcontractor must have received a CAS-covered contract that exceeded $1 million.

FAR 9903.201-2(b) (Modified Coverage).  The definition of modified CAS covered is revised to apply to a covered contract of less than $50 million in net CAS-covered awards in the immediately preceding cost accounting period.  If any one contract is awarded with modified CAS coverage, all CAS-covered contracts awarded to that business during that cost accounting period must also have modified coverage.  An interim rule change to FAR 30.201-4 (Contract Clauses) has been added to require contracting officers to insert the disclosure clause of 52.230-3 (Disclosure and Consistency of Cost Accounting Practices) in negotiated contracts when the contract amount is between $500,000 and $50 million and the offeror certifies it is eligible to use modified CAS coverage.  If, however, the business receives a single CAS-covered contract award of $50 million or more, any covered contract awarded in the same accounting period must be subject to full CAS coverage.

FAR 9903-201-5 (Waiver).  A waiver may apply for a contract less than $15 million if the agency official determines that the business unit performing the work is primarily engaged in the sale of commercial items or would not otherwise be subject to CAS.

The CAS Board may also waive all or any part of the CAS upon request of any agency head.  Such requests must describe the proposed contract and contain (1) a statement the proposed contractor refuses to accept a contract containing all or any of the prime contract CAS clauses (2) a statement whether the proposed contractor or subcontractor has accepted any contracts containing the CAS clause (3) amount of the proposed award and agency awards to the contractor in the last three years (4) a statement that no other source is available to satisfy the agency in a timely manner (5) a statement of alternative methods pursued to fulfill its needs and the reasons they were rejected (6) steps being taken to find other sources for future contracts and (7) any other useful information.

FAR 9903-202-1 (General Requirements).  Increase the dollar amount for requiring submission of a CAS disclosure statement (written description in a prescribed format of contractor’s accounting practices and procedures) from $25 million to $50 million.  The rule also requires submission of a disclosure statement when a company received net award of CAS-covered negotiated contracts totaling $50 million or more in its most recent cost accounting period.  

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