CAS MYTHS VS REALITIES – Edition 21
In this week’s Capital Edge Tip Line, CEO Chad Braley takes a new angle on CAS changes in the government contracts landscape, separating myths from realities.
Key updates from this week’s Tip Line
What’s happening? There are many interpretations happening surrounding CAS changes.
- If a Cost Accounting Standard is eliminated, does the related cost accounting practice disappear too?
- The short answer: no. Organizations are still required to manage cost accounting practice changes even if the associated Cost Accounting Standard was removed.
- Do changes tied to eliminated Standards still require cost impacts?
- Yes. Independent of a Cost Accounting Standard existing, changes to cost accounting practices must be monitored to ensure no unilateral harm to the government.
- Will definitions around increased costs in the aggregate and unilateral cost impacts move into FAR Part 30?
- At this point, we expect these definitions to be incorporated into CAS rules and guidance.
- Will eliminating standards actually simplify CAS compliance for contractors?
- Not necessarily. The standards being eliminated have the lowest noncompliance risk, while the standards most associated with contractor risk exposure — including 403, 410, 418, and 420 — are expected to remain.
How contractors can stay ahead: As with most things in this environment, the answers are more nuanced than the headlines suggest. Contractors should review existing contracts and their associated cost accounting practices to ensure appropriate management both with the standards that were eliminated and those that remain.
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