Overview
FAR Subpart 30.2 prescribes the policies and procedures for applying Cost Accounting Standards (CAS) to negotiated government contracts and subcontracts. It details the criteria for CAS applicability, distinguishes between full and modified coverage, and establishes the requirements for Disclosure Statements, waivers, and mandatory contract clauses.
Key Rules
- Applicability: Negotiated contracts are subject to CAS unless specifically exempted under 48 CFR 9903.201-1. The threshold for applicability is adjusted for inflation (currently aligned with the Truthful Cost or Pricing Data threshold).
- Types of Coverage:
- Full Coverage: Requires compliance with all CAS in effect.
- Modified Coverage: Applicable to contracts between $2.5 million and $50 million (if eligible); requires compliance only with CAS 401, 402, 405, and 406.
- Mandatory Clauses: Contracting Officers must insert specific clauses based on coverage type (e.g., FAR 52.230-2 for Full, 52.230-3 for Modified, and 52.230-5 for Educational Institutions).
- Disclosure Statement Adequacy: A contract subject to CAS cannot be awarded until the Disclosure Statement is determined to be "adequate" by the Cognizant Federal Agency Official (CFAO), unless a high-level waiver for the timing of submission is granted.
- Waivers: Only the Agency Head may waive CAS requirements. This authority is non-delegable below the senior contract policymaking level and is generally reserved for "exceptional circumstances" or specific commercial-item segments with no prior CAS-covered contracts.
Responsibilities
- Contracting Officer (CO): Responsible for determining CAS applicability, ensuring the correct solicitation provisions and clauses are included, and verifying that the offeror has made required certifications and submitted Disclosure Statements.
- Cognizant Federal Agency Official (CFAO): Responsible for issuing formal written determinations regarding the adequacy and compliance of a contractor’s Disclosure Statement.
- Cognizant Auditor: Responsible for performing the actual review of Disclosure Statements to ensure they are current, accurate, and complete, and reporting findings to the CFAO.
- Agency Head: Responsible for approving CAS waivers and, in rare cases, authorizing contract awards before a Disclosure Statement adequacy determination has been made.
Practical Implications
- Accounting System Rigor: For contractors, moving from a non-CAS environment to a CAS-covered environment (especially "Full" coverage) requires a significant investment in accounting infrastructure to ensure costs are tracked and reported with the consistency mandated by the standards.
- Procurement Delays: Because an "adequacy" determination is a prerequisite for award, contractors with poorly documented or non-compliant cost accounting practices may face significant delays in receiving contract awards.
- Subcontractor Flow-down: Prime contractors must carefully manage subcontractors; if a subcontractor is CAS-covered, the Prime must ensure the subcontractor’s CFAO provides an adequacy determination, which then flows up to the Prime's CFAO.
- Commercial Transitions: Large commercial companies entering the defense space must be wary of the $15 million threshold. If they lack a CAS-covered history but win a contract above this amount that isn't for a "commercial product/service," they may lose their exemption status and face full CAS requirements.