Tuesday, November 20, 2012

Cost Accounting Standards - Proposed Revision to an Existing Exemption

Certain contracts are exempt from CAS (Cost Accounting Standards). There are ten general categories of exemptions found in 48 CFR 9903.201-1 including contracts awarded based on a sealed bidding process, commercial items, competitive awards and many others. Previously, we discussed the CAS Board's proposal to modify the (b)(15) exemption to include the word "certified" before the phrase cost or pricing data. This was to distinguish awards based on certified cost or pricing data from awards based on "other than cost or pricing data".

Yesterday, the CAS Board published a proposal to modify another exemption, the (b)(6) exemption which currently reads:
Firm fixed-priced, fixed-priced with economic price adjustments (provided that price adjustment is not based on actual costs incurred), time-and-materials, and labor-hour contracts and subcontracts for the acquisition of commercial items.
The proposed rule would eliminate the detailed listing of permissible contract and subcontract types and simply state:
Contracts and subcontracts for the acquisition of commercial items.
Over the years, the permissible contract types for the acquisition of commercial items has expanded. Statutes such as The Federal Acquisition Streamlining Act (FASA) of 1994, the Federal Acquisition Streamlining Act of 1994 (FARA) and the Services Acquisition Reform Act of 2003 (SARA) have added to the number of contract types that can be used for commercial item procurement. The CAS exemption listing permissible contract types is now too restrictive and has not kept pace with these and other statutes.

The current listing of all CAS exemptions can be found here.

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