Overview
FAR 30.202 outlines the procedural requirements for contractors to submit Disclosure Statements detailing their cost accounting practices. It establishes the roles and responsibilities of Government officials in determining whether these disclosures are both "adequate" (properly described) and "compliant" (legal under CAS and FAR Part 31) before and after contract award.
Key Rules
- Award Restriction: A Contracting Officer (CO) generally cannot award a CAS-covered contract until the Cognizant Federal Agency Official (CFAO) has issued a written determination that the required Disclosure Statement is adequate.
- Division of Responsibility:
- Contracting Officer: Responsible for identifying CAS coverage in solicitations and ensuring certifications are made.
- Auditor: Responsible for the technical review of Disclosure Statements for accuracy, completeness, and CAS compliance.
- CFAO: Responsible for issuing the formal written determinations of adequacy and compliance.
- The Two-Step Determination Process:
- Adequacy Determination: A review to ensure the Disclosure Statement is current, accurate, and complete. This should generally be completed within 30 days of receipt.
- Compliance Determination: A more detailed review conducted after the adequacy determination to ensure the disclosed practices actually comply with CAS and FAR Part 31.
- Limited Approval: A notice of adequacy is not an "approval" of the accounting practices themselves, nor does it mean the contractor is cleared to use those practices for estimating or reporting costs without further scrutiny.
- Subcontractor Flow-down: The CFAO for a subcontractor determines the adequacy of that subcontractor's statement; a higher-tier contractor's CFAO cannot override a lower-tier CFAO’s determination.
Practical Implications
- Procurement Lead Times: Contractors must prepare Disclosure Statements well in advance, as the requirement for an adequacy determination prior to award can delay the procurement process if the statement is found insufficient.
- Audit Scrutiny: Contractors should expect a two-stage audit process where their "descriptions" of accounting methods are evaluated first, followed by a deeper dive into whether those methods meet legal standards.
- Agency Head Waivers: While the rule prohibits award without an adequate disclosure, a "nondelegable" waiver exists for urgent Government interests, though this is rarely invoked and still requires post-award submission.