Overview
FAR Subpart 30.5 is a "Reserved" section within the Federal Acquisition Regulation that serves as a pointer for the administration of Cost Accounting Standards (CAS) specifically applicable to higher education institutions. It directs users to 48 CFR Part 9905, where the Cost Accounting Standards Board (CASB) has codified the actual regulatory requirements for these entities.
Key Rules
- Incorporation by Reference: Because this subpart is "Reserved," the governing rules are not found in FAR Part 30 but are instead found in the CAS Board’s regulations at 48 CFR Part 9905.
- Scope of Standards: Educational institutions are generally subject to four specific standards:
- CAS 501: Consistency in estimating, accumulating, and reporting costs.
- CAS 502: Consistency in allocating costs incurred for the same purpose.
- CAS 505: Accounting for unallowable costs.
- CAS 506: Cost accounting period.
- Thresholds: CAS requirements apply to negotiated federal contracts exceeding the "Truth in Negotiations Act" (TINA) threshold (currently $2 million), with "Full Coverage" triggered by larger award amounts (typically $50 million).
Responsibilities
- Educational Institutions: Must maintain a Disclosure Statement (Form CASB DS-2) if they receive awards above the applicable thresholds, detailing their cost accounting practices.
- Administrative Contracting Officer (ACO): Responsible for making determinations of adequacy and compliance regarding the institution’s Disclosure Statement.
- Cognizant Federal Agency: Usually the Department of Health and Human Services (HHS) or the Office of Naval Research (ONR), which is responsible for auditing and negotiating indirect cost rates and CAS compliance.
- Auditors (DCAA or agency-specific): Responsible for conducting audits to ensure the institution is following its disclosed practices and the standards in 48 CFR 9905.
Practical Implications
In real-world government contracting, this "Reserved" status means that a Contracting Officer or a university administrator cannot rely solely on the FAR to manage CAS compliance. They must look to the specialized CAS Board regulations in 48 CFR Chapter 99.
For example, when a major research university receives a large Department of Defense (DoD) contract, they must ensure their accounting systems do not "double-dip" by charging a cost directly to the contract while also recovering it through their indirect cost pool (F&A costs). Failure to adhere to the rules found in the referenced 48 CFR 9905 can lead to contract price adjustments, interest penalties, and significant audit findings.