CAS Working Group Guidance - Part XII

Today we continue our series on the CAS Working Group Guidance Papers. Between 1975 and 1981, DoD convened a group of CAS "experts" to come up with practical solutions to issues that contracting officers were facing in trying to interpret and apply the (then) new rules and regulations being promulgated by the Cost Accounting Standards Board (CASB). During that time, the Working Group published a total of 25 "interim" guidance papers. According to DoD, twenty of the 25 interim papers are still current. The complete working group guidance papers can be downloaded here.

WG 77-17 - Identification of CAS Contract Universe at a Contractor's Plant

Whenever a contractor makes a change to its disclosed or established accounting practices or is determined to be in noncompliance, FAR requires the contractor submit a cost impact proposal. An integral part of the cost impact proposal is the listing of CAS-covered contracts and subcontracts which will be affected by the change or noncompliance.

The GAO (Government Accountability Office) reported that auditors were spending an inordinate amount of time verifying the completeness and accuracy of the lists submitted by contractors. The GAO recommended that DoD develop a procedure for identifying all the CAS-covered contracts and subcontracts at each contractor's (or subcontractor's) facility.

The CAS clause implicitly requires that contractors are responsible for supplying accurate and complete lists of its CAS covered contracts. However, to preclude any misunderstanding and a consequent loss of time, DoD issued the following guidance:

In order to comply with the requirements of the CAS clause, contractors should be required to maintain a system for identifying accurately and completely all contracts and subcontracts which contain the CAS clause. The ACO (Administrative Contracting Officer) should ensure that the contractor has such a system in place and that it is functioning effectively.

Apparently, accurate record keeping was a problem back in 1977 and from our experience, is still a problem today.