Capital Edge Tip Line – April 7, 2026

The Latest on Contractor Purchasing System Reviews (CPSRs) – Edition 17

In this week’s Capital Edge Tip Line, CEO Chad Braley discusses Contractor Purchasing System Review (CPSR) updates following the DoW's adoption of model deviation text tied to the FAR Overhaul in February 2026.

Key Updates from This Week’s Tip Line

What You Need To Know

What’s happening? Updates from the DoW's adoption of model deviation text tied to the FAR Overhaul have impacts to CPSR applicability, definitions, and purchasing thresholds.

What's being discussed? 

1. Definition updates – Several FAR Part 44 definitions were condensed or removed, and the subcontracts definition now explicitly includes intercompany transfers.
2. CPSR eligibility – The longstanding, “unofficial" $25M CPSR threshold for “qualifying sales" has been removed. With the adoption of the RFO, Contracting Officers now can determine CPSR eligibility based on contract volume, complexity, and subcontract dollar value.
3. Purchasing threshold increases – The increase of the micro purchase threshold to $15k and the simplified acquisition threshold to $350k in October 2025 continues to shape purchasing system expectations, with higher thresholds for contingency operations and defense against certain attacks for both inside and outside the U.S.
4. Common deficiencies persist – We continue to see consistent CPSR deficiencies in areas such as, without limitation, price and cost analysis, source selection justification, FFATA, debarment, DPAS, payments to influence, commerciality determinations, CCPD, and policy and procedure deficiencies.

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Capital Edge Tip Line – March 20, 2026

Q1 Audit Activity – Edition 16

In this week’s Capital Edge Tip Line, CEO Chad Braley discusses Q1 audit activity, which is ramping up and evolving across the government contracts and agency landscape.

Key Updates from This Week’s Tip Line

What You Need To Know

What’s happening? Audit activity is ramping up and evolving across the contracts and agency landscape.

What's being discussed? 

1. DCAA is creating a centralized audit function. Their current focus is government property audits, previously handled by DCMA, and TINA audits for defective pricing. This centralized function doesn’t change the audit execution but will supposedly standardize the management process. 
2. Civilian agencies are stepping into ICS audits. The Department of the Interior is performing ICS audits across the civilian agency space — even where DOI contracts are not involved. 
3. CAS changes are underway. Several CAS standards are being eliminated (404, 408, 411), while others are under review (407, 415, 416). New thresholds for disclosure statements are also being defined, and CAS coverage threshold changes will take effect June 30th. 
4. DoW FAR Overhaul deviations are now active. 31 class deviations for the DoW went into effect February 1st. 
5. Trade Agreements Act thresholds have increased. Thresholds have increased and vary depending on the countries involved. 
6. We’re seeing more OTAs resembling cost-reimbursable contracts. This shift brings different auditability considerations contractors should be thinking about. 

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Capital Edge Tip Line – March 6, 2026

Advance Agreements & Pending Incurred Cost Submission Changes – Edition 15

In this week’s Capital Edge Tip Line, CEO Chad Braley discusses a new court ruling on advance agreements as well as pending changes coming for the Incurred Cost Submission (ICS), which would simplify requirements for government contractors.

Key Updates from This Week’s Tip Line

What You Need To Know

What’s happening? Good news is on the way for the Incurred Cost Submission with simplified requirements. Additionally, a new decision has been made on a long-standing court case on advance agreements.

What's being discussed? 

1. Decisions have been made in the long-standing court case on advance agreements.

The takeaway: Advance agreements must be compliant with the FAR and incorporated into your contract.

2. FAR 52.216-7 Allowable Cost and Payment is being rewritten. Key changes on the table include:

• Eliminating Schedule L
• Moving requirements from Schedule O to Schedule H
• Condensing Schedule K with fewer reporting requirements
• Applying Schedule J only to subcontracts above the new TINA thresholds
• Moving the completion of Schedule I after indirect rates are finalized

The takeaway: The ICS should be getting simplified, which is a win.

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Capital Edge Tip Line – February 20, 2026

2026 NDAA: Nontraditional Defense Contractors – Edition 14

In this week’s Capital Edge Tip Line, CEO Chad Braley revisits the 2026 National Defense Authorization Act (NDAA), with a specific focus on nontraditional defense contractors.

Key Updates from This Week’s Tip Line

What You Need To Know

What’s happening? The 2026 NDAA had several important changes that will simplify requirements for nontraditional defense contractors. Businesses may consider how to take advantage of these changes to operate in a more commercial manner.

What's being discussed? As part of the new NDAA, nontraditional defense contractors are now exempt from:

• DFARS business systems requirements.
• DFARS 215.407, or the successor regulation around areas such as defective pricing, FPRAs, and should-cost reviews.
• 10 USC 3702, meaning they’d no longer need to submit certified cost and pricing data.
• FAR Part 31, or the successor regulation pertaining to the cost principles.

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Capital Edge Tip Line – February 11, 2026

Executive Order: Prioritizing the Warfighter in Defense Contracting – Edition 13

In this week’s Capital Edge Tip Line, CEO Chad Braley dives deeper into what defense contractors should know about the January 7th Executive Order (EO), titled “Prioritizing the Warfighter in Defense Contracting.” 

Key Updates from This Week’s Tip Line

What You Need To Know

What’s happening? The January 7th Executive Order (EO), titled “Prioritizing the Warfighter in Defense Contracting,” gives The Secretary of War the ability to identify government contractors considered underperforming, including issues related to schedule delays, cost overruns, and quality concerns.

What's being discussed?

• Potential implications: Companies that have historically prioritized profits over performance may face restrictions on buying back stock or issuing dividends, along with potential additional limits on executive compensation.
• Review framework: A standard regulatory review framework has not been outlined; however, areas under consideration include investment, modernization, performance, timeliness, and quality.

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Capital Edge Tip Line – January 26, 2026

2026 National Defense Authorization Act (NDAA) – Edition 12

In this week’s Capital Edge Tip Line, CEO Chad Braley dives deeper into the 2026 National Defense Authorization Act (NDAA) and the key changes impacting Capital Edge's clients.

Key Updates from This Week’s Tip Line

What You Need To Know

What’s happening? The 2026 National Defense Authorization Act (NDAA) was just published and presents key changes that will impact government contractors.

What's being discussed?

1. TINA Thresholds: Truthful cost and pricing data (TCPD) thresholds are increasing from $2.5 million to $10 million, which will eliminate the need to certify data for smaller contracts.
2. CAS Threshold: CAS thresholds are increasing to $35 million for modified coverage and full CAS coverage is increasing from $50 million to $100 million, which will eliminate requirements for about 10% of the current CAS contract dollars.
3. Cost Impacts: Industry gets a big win as related to netting multiple cost impacts occurring in the same year and excluding FFP contracts.
4. CAS Board: The CAS Board is expanding and by 2028, DCAA is no longer at the table.

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Capital Edge Tip Line – August 21, 2025

CAS Board Discussions – Edition 11

In this week’s Capital Edge Tip Line, CEO Chad Braley dives deeper into the ongoing CAS Board Discussions and the areas that Capital Edge has followed and commented on during the open public period.

Key Updates from This Week’s Tip Line

CAS Board Discussions – What You Need To Know

What’s happening? CAS Board Discussions are underway and we're here to provide updates based upon what we've followed and commented on during the open public period.

What's being discussed?

1. Statutory Threshold: Right now, the base CAS contract value of $2 million is tied to the same threshold used for Truthful Cost or Pricing Data (formerly known as TINA). The proposal would decouple them, with CAS having its own threshold, and TINA its own. There’s also talk of raising the TINA threshold beyond the scheduled inflation adjustment set to go into effect this October.
2. Regulatory Threshold: There are rumblings that the CAS coverage threshold may jump from $50 million to $100 million. The current $7.5 million “trigger contract” value could be eliminated altogether. And the CAS-covered minimum value, currently $2 million, could rise to $10 million or even $25 million. These potential updates echo recommendations from the Section 809 Panel and other policy groups.
3. Conformance to GAAP: The CAS Board is continuing its push to align certain standards more closely with GAAP. The key question is whether these areas are already adequately addressed in FAR 31 and GAAP, making CAS redundant.
   • In active review now are four standards:
     • 404: Capitalization of Tangible Assets
     • 408: Compensation for Personal Absence
     • 409: Depreciation
     • 411: Acquisition Cost of Material
   • Three more are under consideration for removal or revision:
     • 407: Standard Costs for Direct Labor and Materials
     • 415: Deferred Compensation
     • 416: Insurance Cost
4. Cost Impacts: There’s discussion of a potential FAR deviation related to 36.003, in light of the 2023 NRD memo following the Raytheon case. That memo’s Scenario 2 contradicts the court decision and is viewed as unfavorable to contractors. Many are hoping for clearer alignment between CAS cost impact rules and the statute.
5. CAS to Indefinite Delivery Contracts: This is an area we directly commented on during the open public period. The push is to apply CAS thresholds at the task order level, not at the total IDIQ value. That shift would help avoid the flawed assumption that a $200 million contract split across multiple vendors should automatically trigger CAS. One proposal suggests a $25 million threshold, still high enough to exempt most task orders, while keeping high-value contracts covered.

What this means for you:If these proposed CAS updates move forward, they could ease the compliance load for many contractors while keeping meaningful oversight in place. Discussions are underway and we’ll continue to monitor developments and keep you informed.

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Capital Edge Tip Line – August 8, 2025

FAR Overhaul Update: FAR Part 31 Main Takeaways – Edition 10

In this week’s Capital Edge Tip Line, CEO Chad Braley dives deeper into the Revolutionary FAR Overhaul (RFO) and what you need to know about the changes to FAR Part 31.

Key Updates from This Week’s Tip Line

FAR Part 31 – What You Need To Know

What’s happening? We've been anticipating updates from the Revolutionary FAR Overhaul (RFO) and are starting to get answers.

What's changed?

• Definitions (31.001): Thirteen were removed, mostly related to standard costing methods for labor, materials, and inventory valuation.
• Advance agreements (31.205-46(5)): Language was strengthened slightly. What used to read as “may be useful” now says Contracting Officers “should consider them”.
• Depreciation & rental costs: All references to FASB ASC 840 were replaced with ASC 842, reflecting current accounting standards.
• Relocation costs (31.205-35): A small but specific change: mortgage title policies are now allowable if tied to acquiring a home in a new location.

What this means for you: This round of FAR updates didn’t eliminate complexity or streamline compliance. It just brought language up to date with current practices. Expect more buying guides, more trickle-down guidance, and if you're in compliance or contracts, plenty of job security.

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Capital Edge Tip Line – June 25, 2025

DCAA Sustainment Rates, Audit Timelines & OTA Government Contracts - Edition 9B

With DCAA's FY2024 data now in focus, contractors are getting clearer insights into what sticks in an audit—and what doesn’t. In this week’s Capital Edge Tip Line, CEO Chad Braley breaks down the agency’s audit sustainment rates, completion timelines, and growing oversight into OTA government contracts. He also highlights where audit activity is rising in other agencies, including HHS.

Key Updates from This Week’s Tip Line

Audit Sustainment Rates – What’s Being Upheld

???? What’s happening? Nearly 49% of DCAA audit exceptions were sustained by contracting officers across all categories in FY2024.

???? Breakdown by audit type:

• Forward Pricing: 57.9% sustained
• Business Systems / CAS / TINA: 53.2%
• Claims & Terminations: 45.4%
• Incurred Cost: 31.4%

???? What it means for you:

• The likelihood of a sustained exception is higher in forward pricing and system reviews.
• Some 2024 sustainments stem from prior fiscal year findings.

???? Action Item: Treat every audit finding seriously. Even if the audit occurred years ago, current sustainment decisions may still apply.

Audit Timelines – How Long You Should Expect

???? What’s happening? Audit cycle times remain long, particularly for complex systems reviews.

???? Average durations:

• Incurred Cost: 204 days
• Forward Pricing: 96 days
• Business Systems / CAS / TINA: 291 days
• Claims & Terminations: 175 days

???? Chad’s take: A low-risk letter from DCAA does not equal a clean bill of compliance. Many contractors assume approval when they’ve only passed the adequacy checklist.

???? Action Item: Prepare for extensive durations. Keep your documentation current, even if your last contact from DCAA was a simple memo.

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Whether you're preparing for a business systems review or need help navigating OTA government contracts, Capital Edge is your trusted compliance partner.

???? Have Questions? Need Help?

Connect with Capital Edge Consulting for proven audit strategies.

???? Contact us today to discuss your strategy for staying tariff-ready.

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Capital Edge Tip Line – June 20, 2025

Inside DCAA’s FY24 Annual Report to Congress with Chad Braley - Edition 9A

DCAA’s newly released FY24 Report to Congress offers a rare window into the agency’s audit activity, exception rates, and cost savings metrics. In this week’s Capital Edge Tip Line, CEO Chad Braley unpacks the highlights, questions the numbers behind the “return on investment” claims, and shares what it all means for contractors going forward.

Key Updates from This Week’s Tip Line

Audit Activity Snapshot: Where DCAA Focused Its Efforts

???? What’s happening? DCAA examined nearly $600 billion in contract costs, the most in five years, while claiming $5.1 billion in net taxpayer savings and a $7.20 return on every audit dollar.

???? What it means for you:

• Only 9.8% of 3,558 incurred cost submissions triggered an audit report.
• In contrast, 87% of ~750 forward pricing submissions resulted in formal audits.
• Business systems, CAS, and TINA reviews saw just 12.8% converted to audits—yet were included in DCAA’s ROI calculations.

???? Action item: Forward pricing submissions remain high-risk for audit. Consider strengthening supporting documentation before submission.

Audit Exceptions by Category: What Got Flagged

???? What’s happening? DCAA identified $5.9 billion in audit exceptions—about 2.7% of the total costs reviewed.

???? Breakdown by type:

• Forward Pricing: 7.4% exception rate (highest)
• Claims/Terminations: 4%
• Business Systems, CAS & TINA: 2.1%
• Incurred Cost: Less than 1%

???? Action item: Prioritize internal reviews for forward pricing and terminations. Even with lower scrutiny, ensure incurred cost submissions are clean and defensible.

Monetized Estimates: DCAA’s ROI Calculation Controversy

???? What’s happening? DCAA now includes “monetized estimates” of cost savings from business system and CAS audits—even when no direct dollar findings are issued.

???? What it means for you:

• System weaknesses, like procedural gaps or indirect rate misalignments, are now assumed to generate savings.
• This significantly boosts reported ROI—business systems/CAS audits now claim an 11.3:1 return.

???? Chad’s take: "We’ve seen system reviews identify material weaknesses without any financial findings. It’s unclear how DCAA is projecting cost savings from these reviews.”

• Forward Pricing Audits: 11.7:1 ROI
• Business Systems / CAS: 11.3:1 (with monetized estimates)
• Incurred Cost Submissions: 3.5:1
• Claims & Terminations: 2:1
• Overall Average: 7.2:1

???? Action item: Don’t just watch for audits, watch how agencies justify value. Audit scrutiny may not follow volume alone.

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DCAA’s evolving focus, audit thresholds, and performance metrics directly impact how contractors prepare for oversight.

???? Have Questions? Need Help?

Reach out to Capital Edge Consulting to ensure your audit strategy aligns with DCAA expectations.

???? Contact us today to discuss your strategy for staying tariff-ready.

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