We can help you with everything from evaluating your CAS compliance status to settling audit issues.
Fiscal year 2021 spending topped $637 billion on federal contract awards. Government contract spending, however, is in many instances attached to various cost accounting regulatory requirements designed around the proper accumulation and allocation ofcontractors’ costs. Wrapped into these regulatory requirements are the Cost Accounting Standards (CAS). The CAS address how costs are measured (amount), assigned (which cost accounting period) and allocated (distributed) to specific contracts. The CAS do not deal with which specific or types of costs are allowable or unallowable – cost allowability is generally governed by Part 31 of the Federal Acquisition Regulation (FAR).The CAS provide flexibility when making a choice on a variety of compliant cost accounting practices and, understanding these options obliges capabilities and expertise in government contract cost accounting and pricing regulations and compliance requirements.
Capital Edge understands the intricate nuances of the CAS and employs essential professionals with extensive years of experience who have assisted numerous clients from initial CAS compliance implementations and resolving CAS noncompliance allegations, to processing cost accounting practice changes. We evaluate the compliance and effectiveness of client cost accounting practices, prepare or revise CAS Disclosure Statements, and assist with preparation of cost impact analyses, to monitoring compliance implementation, and everything in between.
Our government contract compliance team is comprised of and employs more U.S. Government contracting compliance capabilities and CAS thought leaders than any other consulting firm, dedicated solely to federal procurement compliance, in the marketplace. Capital Edge provides a valued-added and unique approach to all of our client engagements, including CAS-related matters as our solution offers a diverse mix of leadership, consisting of former U.S. Government Officials, industry experts, Big-4 advisory and consulting directors and policy thought leaders who previously worked for contractors serving DoD and Civilian agencies.
Our Cost Accounting Standards Solutions Include:
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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.
Here are some of the more common questions being asked about CAS
The following Contracts are exempt from CAS coverage:
CAS is applicable to Contracts. A contract is CAS covered if:
There are three types of CAS coverage:
FAR 30.320-1 defines a cost accounting practice as any disclosed or established accounting method or technique which is used for allocation of cost to cost objectives, assignment of cost to cost accounting periods, or a measurement of cost. Any changes in our organization that affect allocation, assignment, or measurement of cost could result in a cost accounting practice change.
There are 3 classification of cost accounting practice changes:
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.
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.
Capital Edge government contract consultants support Government Contractors and Federal Grant Recipients. Our consultants specialize in the regulatory compliance matters you need.
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