Overview
Subpart 30.4 of the Federal Acquisition Regulation (FAR) serves as a regulatory placeholder that redirects users to the substantive requirements of the Cost Accounting Standards (CAS). Rather than duplicating the text within the FAR, this subpart points directly to 48 CFR Part 9904, where the specific standards promulgated by the Cost Accounting Standards Board (CASB) are codified.
Key Rules
- Incorporation by Reference: The specific requirements for cost accounting practices are not housed in the FAR but are incorporated by reference via 48 CFR Part 9904.
- Standard Categorization: The standards found in the referenced 48 CFR 9904 cover 19 individual standards (numbered 401 through 420), including:
- CAS 401: Consistency in estimating, accumulating, and reporting costs.
- CAS 402: Consistency in allocating costs incurred for the same purpose.
- CAS 405: Accounting for unallowable costs.
- CAS 410: Allocation of business unit general and administrative (G&A) expenses to final cost objectives.
- Precedence: While FAR Part 30 handles the administration of CAS, the substance of the accounting rules resides in the CASB regulations.
Responsibilities
- Contracting Officers (CO): Responsible for determining CAS coverage and ensuring the appropriate CAS clauses (e.g., FAR 52.230-2) are included in solicitations and contracts.
- Administrative Contracting Officers (ACO): Tasked with the day-to-day administration of CAS, including evaluating Disclosure Statements and determining if a contractor's cost accounting practices are compliant with the standards in 48 CFR 9904.
- Contractors: Must comply with the specific standards referenced in 48 CFR Part 9904 if their contract is "Full" or "Modified" CAS-covered. This includes maintaining consistent accounting practices and disclosing those practices to the government.
- Auditors (DCAA): Responsible for reviewing contractor cost accounting systems and Disclosure Statements to ensure they align with the standards referenced by Subpart 30.4.
Practical Implications
- The "Two-Step" Research Process: Practitioners cannot rely solely on the FAR to understand cost accounting obligations. They must look at FAR Part 30 for procedural guidance and then jump to 48 CFR 9904 for the technical accounting rules.
- Compliance Risk: Because this subpart is "Reserved," it is a common pitfall for novice contractors to assume there are no specific accounting standards beyond general FAR cost principles (FAR Part 31). Failure to follow the standards in 48 CFR 9904 can lead to significant cost disallowances, price adjustments, and interest penalties.
- Consistency is Mandatory: The standards at the referenced destination (Part 9904) focus heavily on consistency. In real-world scenarios, the government uses these standards to ensure that a contractor does not "double-dip" by charging a cost as both a direct and an indirect expense.