Some Government contractors and prospective Government contractors panic when they hear the word "CAS". They envision more regulations, red tape, and endless documentation and incessant oversight. In reality, CAS, which stands for Cost Acounting Standards, is a series of promulgations designed to promote fair and consistent cost accounting practices and more often than not, are practices that contractors have already implemented.
Some contractors are exempt from CAS. For contractors that are covered by CAS, there is full and modified coverage. First of all, CAS applies only to negotiated contracts. Sealed bids, awards based on adequate price competition without submission of cost or pricing data, contracts in which the price is set by law or regulation, and commercial items are all exempt. Additionally, contracts under $650 thousand, contracts awarded to small businesses (as defined by SBA) and contracts executed and performed outside of the US are also exempt.
The thresholds for full and modified coverage are $50 million and $7.5 million respectively. Modified CAS coverage requires compliance with CAS Standards 401, 402, 405, and 406. Full CAS coverage requries compliance with all 19 CAS Standards. Whether exempt, modified or fully covered, the substance of many CAS standards have been incorporated into the Federal Acquisition Regulations over the years. Take CAS 405 for example. CAS 405 requires contractors to identify and exclude unallowable costs from proposals and billings to the Governments. The same requirement is found in FAR 31.205.