FAR Part 30 Flashcards
Cost Accounting Standards Administration
Part 30
Cost Accounting Standards Administration
Part 30 - Cost Accounting Standards Administration
Overview of FAR Part 30 - Cost Accounting Standards Administration
- Purpose: Establishes policies and procedures for applying cost accounting standards (CAS) to federal contracts (FAR 30.000).
- Key Sections:
30.1 General
30.2 CAS Program Requirements
30.6 CAS Administration
Part 30 - Cost Accounting Standards Administration
Subpart 30.1 - General
- Purpose: Provides general policies and guidelines for CAS
administration (FAR 30.101). - Key Features:
- Defines the scope and applicability of CAS (FAR 30.102).
- Emphasizes the importance of compliance with CAS to ensure accurate cost allocation (FAR 30.103).
Part 30 - Cost Accounting Standards Administration
- Slide 3: Subpart 30.2 - CAS Program Requirements
- Purpose: Establishes the requirements for contractors to comply with
CAS (FAR 30.201). - Key Features:
- Criteria for determining CAS applicability to contracts (FAR 30.202).
- Requirements for submitting CAS disclosure statements and maintaining compliance (FAR 30.203).
Part 30 - Cost Accounting Standards Administration
Subpart 30.2 - CAS Disclosure and Compliance
- Purpose: Provides detailed guidelines for CAS disclosure and
compliance (FAR 30.204). - Key Features:
- Procedures for submitting and updating CAS disclosure statements (FAR
30.205). - Guidelines for maintaining CAS compliance throughout the contract lifecycle (FAR 30.206).
Part 30 - Cost Accounting Standards Administration
Subpart 30.6 - CAS Administration
- Purpose: Establishes the procedures for administering CAS
requirements in federal contracts (FAR 30.601). - Key Features:
- Responsibilities of contracting officers and auditors in administering CAS (FAR
30.602). - Procedures for resolving CAS noncompliance and making necessary adjustments (FAR 30.603).
Cost Accounting Standards (CAS)
Federal standards designed to provide a consistency and coherency in defense and other government contract accounting
Developed by the Cost Accounting Standards Board (CASB)
- An independent board within OFPP
Five members:
* OFPP Administrator
* Two government members (one from DOD, one from GSA) * One person from private industry
* One person from accounting
Cost Accounting Standards
Printed in title 48 of the Code of Federal Regulations, Chapter 99, and incorporated by reference ni FAR Part 30
41 U.S.C. 422 requires certain contractors and subcontractors
ot comply with CAS and ot disclose ni writing and folow consistently their cost accounting practices
CAS Program Requirements
The contracting officer is responsible for:
- Determining when a proposed contract may require
CAS coverage, - Including the appropriate notice in the solicitation,
- Ensuring the offeror has made the required solicitation certifications, and
- Ensuring the required disclosure statements are submitted
CAS Applicability
Al negotiated contracts not exempted by 48 CFR 9903.201-
1(b) are subject to CAS
CAS Applicability
CAS requirements do not apply to contracts:
- Awarded using sealed bidding procedures;
- Below the threshold for Truthful Cost or Pricing Data;
- With small businesses or foreign governments;
- In which the price is set by law or regulation;
- For commercial items, fi using FFP, FFP with economic price adjustment, time-and-materials, or labor-hour pricing;
- Under $7.5 million, fi
the contractor is not
performing any
CAS-covered contracts valued at $7.5 million or greater; or - Awarded without submission of cost or pricing data
Types of CAS Coverage
Full coverage
Requires that the contractor comply with all CAS in effect on the date of award and any CAS that become applicable because of a later award
Applies to contractors receiving $50 million or more in
CAS-covered awards, either as a single award or net awards during its preceding cost accounting period
Types of CAS Coverage
Modified coverage
Requires that the contractor comply only with certain CAS
May be applied to a covered contract of less than $50 million awarded to a contractor that received less than $50 million in net CAS-covered awards in the immediately preceding cost accounting period.
Types of CAS Coverage
Coverage for educational institutions
Educational institutions have some modified definitions but are generally subject to all CAS requirements
Types of CAS Coverage
Coverage for subcontracts
- Subcontracts are subject to the same type of coverage as a prime contract awarded to the same contractor
Waiving the CAS Requirements
The head of the agency may waive the applicability of CAS for a particular contract or subcontract f:i
The value is less than $15 million
The segment of the contractor is primarily engaged ni the sale of commercial items and
has no CAS-subject contracts
OR
- The agency head determines and
documents in writing that exceptional circumstances require
a waiver of CAS to meet agency needs
Disclosure Statements
Submitted by:
Contractors and subcontractors awarded contracts or subcontracts
exceeding the $50 million threshold *
Contractors and subcontractors
whose net CAS-covered awards exceed $50 million in the most recent accounting period
Disclosure Statements
Contains
- General information
- Direct costs
- Direct vs indirect costs
- Indirect costs
- Depreciation and capitalization
*Other costs and credits
- Deferred compensation and insurance
- Home office expenses
Disclosure Statements
Cognizant federal agency official (CFAO)
The contracting officer assigned by the cognizant federal agency to administer the CAS
Responsible for determining that any disclosure statement is adequate and compliant
The contracting officer shall not award a CAS- covered contract until the CFAO has made this
determination in writing
Responsible for performing CAS administration for al contracts and subcontracts ni a business unit notwithstanding retention of other administration functions by the contracting officer
Within 30 days after award of a CAS-covered contract or subcontract, the contracting officer, contractor, or subcontractor making the award shall request the CFAO to perform administration
Changes to Cost Accounting Practices
Required changes
Offerors shall state whether or not the award of a contract would require a change to an established
cost accounting practice affecting existing contracts and subcontracts
The contracting officer shall notify the CFAO fi the offeror states that such a change would be required.
Changes to Cost Accounting Practices
Unilateral changes
The contractor may unilaterally change its disclosed or established cost accounting practices
The government wil not pay any increased cost as a result of a unilateral change
A. COST ACCOUNTING STANDARDS (FAR 30.1)
Public Law 100-679 (41 U.S.C. 422) requires
certain contractors and subcontractors to comply with Cost Accounting Standards (CAS) and
to disclose in writing and follow consistently their cost accounting practices.
B. CAS PROGRAM REQUIREMENTS (FAR 30.2)
The contracting officer is responsible for determining when a proposed contract may require CAS coverage and
for including the appropriate notice in the solicitation.
The contracting officer must then ensure that the offeror has made the required solicitation certifications and that required disclosure statements are submitted.
The contracting officer shall not award a CAS-covered contract until the cognizant federal agency official
(CFAO) has made
a written determination that a required disclosure statement is adequate unless, to protect the government’s interest, the agency head authorizes award without obtaining the required disclosure statement.
In this event, a determination of adequacy shall be required as soon as possible after the award.
The head of the agency may waive the applicability of
CAS for a particular contract or subcontract when either of the following situations exists:
- The contract or subcontract value is less than the threshold prescribed in FAR 30.201-5(b)(1), and the segment of the contractor or subcontractor that will perform the contract or subcontract is primarily engaged in the sale of commercial items and has no contracts or subcontracts that are subject to CAS; or
Exceptional circumstances exist whereby a waiver of CAS is necessary to meet the needs of the agency. Exceptional circumstances exist only when the benefits to be derived from waiving the CAS outweigh the risk associated with the waiver. The determination that exceptional circumstances exist must be set forth in writing and include a statement of the specific circumstances that justify granting the waiver.
C. CAS ADMINISTRATION (FAR 30.6)
This subpart describes policies and procedures for applying the Cost Accounting Standards Board (CASB) rules and regulations (48 CFR Chapter 99) to negotiated contracts and subcontracts.
It does not apply
to sealed bid contracts or to any contract with a small business concern. (See 48 CFR 9903.201-1(b)) for these and other exemptions.)
The CFAO shall perform CAS administration for all contracts and subcontracts in a business unit notwithstanding retention of other administration functions by the contracting officer.
Within 30 days after the award of any new contract subject to CAS, the contracting officer
making the award shall request the CFAO to perform administration for CAS matters. (See subpart 42.2).
For subcontract awards, the contractor awarding the subcontract must follow the procedures at FAR 52.230-6 (1), (m), and (n).
D. CHANGES TO DISCLOSED OR ESTABLISHED COST ACCOUNTING
PRACTICES (FAR 30.603)
REQUIRED CHANGES:
Offers shall state whether the award of a contract would require a change to an established cost accounting practice affecting existing contracts and subcontracts (see FAR 52.230-1).
The contracting officer shall notify the CFAO if the offeror
UNILATERAL CHANGES:
The contractor may unilaterally change its disclosed or established cost accounting practices, but the government shall not pay any increased cost, in the aggregate, as a result of the unilateral change.
DESIRABLE CHANGES:
Prior to acting under the applicable paragraphs) addressing a desirable change at 52.230-2, 52.230-3, or 52.230-5, the CFAO shall determine the change is a desirable change and not detrimental to the interests of the government.
Until the CFAO has determined a change to a cost accounting practice is a desirable change, the change is a unilateral change.
Some factors to consider in determining if a change is desirable include, but are not limited to, whether:
- The contractor must change the cost accounting practices it uses for government contract and
subcontract costing purposes to remain in compliance with the provisions of part 31; - The contractor is initiating management actions directly associated with the change that will result in cost savings for segments with CAS-covered contracts and subcontracts over a period for which forward pricing rates are developed or five years, whichever is shorter, and the cost savings are reflected in the forward pricing rates; and
“Funds are available if the determination would necessitate an upward adjust-ment of contract cost or price.
