Fixed Price Incentive | 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

There is a lot of talk about the next generation of reforms and changes to the regimes of government acquisition policies, practices and culture.

But two stark examples emerged almost simultaneously in recent weeks that highlight just how far we have to go to create a federal acquisition system that is effective, efficient, responsive to the needs of customers, and enables access to the full array of capabilities the private sector can offer.

One example speaks directly to continued cultural challenges and the other to the mindset that drives far too much current policy and practice.

Let’s start with the culture. In a Nov. 7 article in Government Executive magazine, Kimberly McCabe, the CEO of ASI Government and Dan Chenok, the head of the IBM Center for the Business of Government, made a strong, thoughtful, and articulate case for thinking about acquisition in a holistic manner with an eye toward the realities of today and a very different future.

Moreover, their article outlined a new framework designed to describe and help measure organizational acquisition capabilities and maturity. And, perhaps most significantly, recognizing that the pressure for real, sustainable change has to come from within, the framework they outlined was largely the work of a group of federal acquisition and technology practitioners—from rising professionals to senior executives—they had convened.

Keep reading this article at: http://washingtontechnology.com/articles/2014/12/05/insights-soloway-acquisition-reform.aspx

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.

Acquisition reform? Who says?

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