Overview
This section defines the applicability of Cost Accounting Standards (CAS) to commercial product and service acquisitions, establishing a general exemption for most fixed-price contract types.
Key Rules
- General Exemption: CAS does not apply to firm-fixed-price (FFP) contracts or subcontracts for the acquisition of commercial products or commercial services.
- Fixed-Price with Economic Price Adjustment (FP-EPA): CAS is waived for FP-EPA contracts for commercial items, provided the price adjustments are not based on actual costs incurred.
- Actual Cost Exception: If an FP-EPA contract for commercial items bases its adjustments on actual costs, the contracting officer must refer to FAR 30.201-1 to determine CAS applicability.
- Implementation Requirement: When a commercial contract is determined to be subject to CAS, the contracting officer is required to insert the specific clauses and provisions prescribed in FAR 30.201.
Practical Implications
- Most commercial contractors are relieved from the administrative burden of CAS compliance, as the vast majority of commercial acquisitions utilize firm-fixed-price structures.
- Contractors must be careful when negotiating Economic Price Adjustments; if the adjustment mechanism is tied to the contractor's actual cost experience rather than an external index, it may trigger complex CAS disclosure and compliance requirements.