The CAS rules at 48 CFR Chapter 99, published under Public Law 100–679 (41 U.S.C. 422), require contractors and subcontractors performing under applicable CAS-covered contracts to comply with the CAS, disclose its cost accounting practices in writing, and consistently follow its disclosed cost accounting practices.  A contractor may elect to change its previously disclosed cost accounting practice(s), however, are required to follow the administrative procedures pursuant to FAR Subpart 30.6 noted above.

The individual standards set forth various cost accounting practice options that contractors may elect regarding the methods used pertaining to the measurement, assignment, and allocation of direct and indirect costs.Consistent use of compliant cost accounting practices mitigates the risk of misallocation and mischarging of costs under all contracts (CAS-covered and not), and provides the U.S. Government the ability to compare contractor cost representations on a more uniform and consistent basis amongst several contractors.

The CAS consist of 19 individualstandards listed below that will form the level of compliance requirements under specific contracts.  Modified CAS-coverage requires compliance with CAS 401, 402, 405 and 406 and full CAS-coverage requires compliance with all 19 standards.   

• CAS 401 - Consistency in Estimating, Accumulating, and Reporting
• CAS 402 - Consistency in Allocating Costs Incurred for the Same Purpose
• CAS 403 - Allocation of Home Office Expenses to Segments
• CAS 404 - Capitalization of Tangible Assets
• CAS 405 - Accounting for Unallowable Costs
• CAS 406 - Cost Accounting Period
• CAS 407 - Use of Standard Costs for Direct Material and Direct Labor
• CAS 408 - Accounting for Costs of Compensated Personal Absence
• CAS 409 - Depreciation of Tangible Capital Assets
• CAS 410 - Allocation of Business Unit General and Administrative Expenses to Final Cost Objectives
• CAS 411 - Accounting for Acquisition Costs of Material
• CAS 412 - Composition and Measurement of Pension Cost
• CAS 413 - Adjustment and Allocation of Pension Cost
• CAS 414 - Cost of Money as an Element of the Cost of Facilities
• CAS 415 - Accounting for the Cost of Deferred Compensation
• CAS 416 - Accounting for Insurance Costs
• CAS 417 - Cost of Money as an Element of the Cost of Capital Assets under Construction
• CAS 418 - Allocation of Direct and Indirect Costs
• CAS 419 - Reserved - Not Used
• CAS 420 - Accounting for Independent Research and Development and Bid and Proposal Costs

CAS is applicable to Contracts. A contract is CAS covered if:

• Unless otherwise exempt from CAS, a negotiated contract in excess of $2,000,000, awarded during performance of a “trigger contract”
• “Trigger Contract” – single CAS covered contract greater than or equal to $7.5 million
• Full CAS “Trigger Contract” – single CAS covered contract greater than or equal to $50 million or received $50 million or more in net CAS covered award in its preceding Cost Accounting Period

• CAS 401 — Consistency in estimating, accumulating & reporting

This standard requires contractors to use consistent practices between estimating cost and accumulating and report costs.  Inversely, the practices used in accumulating and reporting costs must be consistent with estimating cost. 

For example, if a contractor estimates (i.e., proposes) engineering labor cost by function (e.g., drafting, product engineering, etc.), engineering labor costs must also be accumulated and reported by function.  In this example, if engineering costs are estimated by function and accumulated and reported in total, this is a non-compliance with CAS 401. 

• CAS 402 — Consistency in allocating costs for same purpose

This standard helps eliminate the risk of “double counting” costs to the U.S. Government and ensure that costs incurred for the same purpose in like circumstances are accounted for consistently. 

If a contractor is required to submit a CASB Disclosure Statement, these practices are defined within the Disclosure Statement.