cost accounting | The Contracting Education Academy

After publishing a proposed rule more than five and a half years ago, the Cost Accounting Standards (CAS) Board on July 17, 2018 issued a final rule revising the CAS exemption for contracts or subcontracts for the acquisition of commercial items.

The final rule clarifies that the current CAS exemption for commercial items extends to all contract types listed in Federal Acquisition Regulation (FAR) 12.207. However, in doing so, it also creates a potential audit issue arising out of the conditions levied by FAR 12.207 on certain contract types.

FAR lists contract types the government may use to acquire commercial items, including firm-fixed-price (FFP) contracts in conjunction with award fee incentives or performance/delivery incentives, known as fixed-price incentive (FPI) contracts. The relevant CAS commercial item exemption states that certain types of contracts for the acquisition of commercial items are exempt from all CAS. CAS 9903.201-1(b)(6) lists various contract types, including FFP, fixed-priced with economic price adjustment, time-and-materials (T&M) and labor-hour (LH), but makes no mention of FPI contracts. This inconsistency is the result of various amendments over time by the FAR Council to FAR 12.207. The final rule amends the language in CAS 9903.201-1(b)(6) to exempt commercial item contracts and subcontracts authorized in FAR 12.207 from all CAS requirements. Look for this change to CAS 9903.201-1(b)(6) when the final rule becomes effective on August 16, 2018.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=726522

The Defense Department has proposed updating its acquisition regulations to require major contractors subject to cost accounting standards – and their large subcontractors – to have anti-counterfeit avoidance and detection systems in place for electronic parts.

The long-awaited proposal, issued mid-May, would implement requirements from the fiscals 2012 and 2013 national defense authorization acts, passed amid concern that counterfeit milspec electronic parts have made their way into weapons systems, potentially undermining their reliability or making them open to a remote cyber attack – although cybersecurity experts have said the risk presented by the latter possibility is relatively low.

The proposal would require companies with cost-reimbursement contracts subject to cost-accounting standards (a requirement that can’t be valid for contracts worth less than $700,000) to mount an acceptable anti-counterfeiting effort that would include training, inspection, parts traceability, use of “trusted suppliers” and a methodology to rapidly determine whether a suspect part is, in fact, counterfeit. The proposed rule doesn’t define what a trusted supplier would be.

Keep reading this article at: http://www.fiercegovernmentit.com/story/dod-proposes-anti-counterfeit-it-measures/2013-06-04

CAS Board clarifies commercial item exemption, but raises potential audit issue

After publishing a proposed rule more than five and a half years ago, the Cost Accounting Standards (CAS) Board on July 17, 2018 issued a final rule revising the CAS exemption for contracts or subcontracts for the acquisition of commercial items.

DoD proposes anti-counterfeit IT measures

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