Overview
FAR Subpart 30.1 provides the regulatory foundation for the application of Cost Accounting Standards (CAS) to federal contracts as mandated by 41 U.S.C. chapter 15. It establishes the requirement for certain contractors to formally disclose their accounting practices in writing and ensures that these practices are applied consistently to prevent cost shifts or accounting inconsistencies.
Key Rules
- Statutory Compliance: Contractors and subcontractors meeting specific thresholds must comply with the Cost Accounting Standards (CAS) and the regulations of the Cost Accounting Standards Board (CASB).
- Written Disclosure: Applicable contractors are required to disclose their cost accounting practices in writing (typically via a Disclosure Statement).
- Consistency Requirement: Contractors must follow their disclosed practices consistently across all covered contracts and periods.
- Incorporation by Reference: All policies, standards, and regulations promulgated by the CASB in 48 CFR Chapter 99 are officially incorporated into FAR Part 30.
- Reference Standardization: Any contract referencing FAR Part 30 is legally deemed to refer to the entirety of CASB regulations.
Responsibilities
- Contractors and Subcontractors: Responsible for determining if they are subject to CAS, submitting written Disclosure Statements, and maintaining internal controls to ensure consistent application of accounting practices.
- Cost Accounting Standards Board (CASB): Responsible for promulgating the standards and regulations found in 48 CFR Chapter 99.
- Contracting Officers (CO): Responsible for ensuring the appropriate CAS clauses are included in solicitations and contracts.
- Superintendent of Documents (GPO): Responsible for the official publication and distribution of the CASB Standards and Regulations.
Practical Implications
- Administrative Overhead: For contractors, "CAS coverage" signifies a high level of administrative maturity. The requirement for a formal Disclosure Statement means that every aspect of how costs (direct and indirect) are allocated must be documented and defended.
- Audit Risk: Because consistency is a legal requirement under 30.101(a), any deviation from a contractor’s established accounting manual or Disclosure Statement can lead to "non-compliance" findings, potentially resulting in price adjustments or interest penalties.
- Uniformity Across Agencies: By incorporating 48 CFR Chapter 99, this subpart ensures that a contractor uses the same accounting rules whether they are working for the DoD, NASA, or the Department of Energy, preventing the need for multiple sets of books for different agencies.
- Subcontractor Flow-down: Prime contractors must be vigilant in flowing these requirements down to subcontractors, as the prime is often held responsible for the subcontractor's CAS compliance.