FAR Part 30

Question 1

Part 30

Answer 1

Cost Accounting Standards Administration

Question 2

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:

Answer 2

30.1 General

30.2 CAS Program Requirements

30.6 CAS Administration

Question 3

Part 30 - Cost Accounting Standards Administration

Subpart 30.1 - General

• Purpose: Provides general policies and guidelines for CAS
  administration (FAR 30.101).
• Key Features:

Answer 3

• 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).

Question 4

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:

Answer 4

• Criteria for determining CAS applicability to contracts (FAR 30.202).
• Requirements for submitting CAS disclosure statements and maintaining compliance (FAR 30.203).

Question 5

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:

Answer 5

• Procedures for submitting and updating CAS disclosure statements (FAR
  30.205).
• Guidelines for maintaining CAS compliance throughout the contract lifecycle (FAR 30.206).

Question 6

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:

Answer 6

• Responsibilities of contracting officers and auditors in administering CAS (FAR
  30.602).
• Procedures for resolving CAS noncompliance and making necessary adjustments (FAR 30.603).

Question 7

Cost Accounting Standards (CAS)

Answer 7

Federal standards designed to provide a consistency and coherency in defense and other government contract accounting

Question 8

Developed by the Cost Accounting Standards Board (CASB)

Answer 8

• 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

Question 9

Cost Accounting Standards

Answer 9

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

Question 10

CAS Program Requirements

The contracting officer is responsible for:

Answer 10

• 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

Question 11

CAS Applicability

Answer 11

Al negotiated contracts not exempted by 48 CFR 9903.201-
1(b) are subject to CAS

Question 12

CAS Applicability

CAS requirements do not apply to contracts:

Answer 12

• 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

Question 13

Types of CAS Coverage

Full coverage

Answer 13

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

Question 14

Types of CAS Coverage

Modified coverage

Answer 14

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.

Question 15

Types of CAS Coverage

Coverage for educational institutions

Answer 15

Educational institutions have some modified definitions but are generally subject to all CAS requirements

Question 16

Types of CAS Coverage

Coverage for subcontracts

Answer 16

• Subcontracts are subject to the same type of coverage as a prime contract awarded to the same contractor

Question 17

Waiving the CAS Requirements

The head of the agency may waive the applicability of CAS for a particular contract or subcontract f:i

Answer 17

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

Question 18

Disclosure Statements

Submitted by:

Answer 18

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

Question 19

Disclosure Statements

Contains

Answer 19

• General information
• Direct costs
• Direct vs indirect costs
• Indirect costs
• Depreciation and capitalization

*Other costs and credits

• Deferred compensation and insurance
• Home office expenses

Question 20

Disclosure Statements

Cognizant federal agency official (CFAO)

Answer 20

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

Question 21

Changes to Cost Accounting Practices

Required changes

Answer 21

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.

Question 22

Changes to Cost Accounting Practices

Unilateral changes

Answer 22

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

Question 23

A. COST ACCOUNTING STANDARDS (FAR 30.1)

Public Law 100-679 (41 U.S.C. 422) requires

Answer 23

certain contractors and subcontractors to comply with Cost Accounting Standards (CAS) and

to disclose in writing and follow consistently their cost accounting practices.

Question 24

B. CAS PROGRAM REQUIREMENTS (FAR 30.2)

The contracting officer is responsible for determining when a proposed contract may require CAS coverage and

Answer 24

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.

Question 25

The contracting officer shall not award a CAS-covered contract until the cognizant federal agency official
(CFAO) has made

Answer 25

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.

Question 26

The head of the agency may waive the applicability of
CAS for a particular contract or subcontract when either of the following situations exists:

Answer 26

• 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.

Question 27

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

Answer 27

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.)

Question 28

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

Answer 28

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).

Question 29

D. CHANGES TO DISCLOSED OR ESTABLISHED COST ACCOUNTING
PRACTICES (FAR 30.603)

REQUIRED CHANGES:

Answer 29

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

Question 30

UNILATERAL CHANGES:

Answer 30

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.

Question 31

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:

Answer 31

• 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.