Tuesday, September 24, 2019

NDAA 2020 - Eliminating the Defense Cost Accounting Standards Board

Section 820 of the 2016 NDAA created the Defense Cost Accounting Standards Board, an independent board within the Office of the Secretary of defense. This provision was later codified as 10 USC 190. This seven member board chaired by the Defense Department's CFO with three Government and three private sector members was established to review and recommend changes to existing CAS standards (Cost Accounting Standards) and to implement new standards for Defense contractors to achieve uniformity and consistency for measurement, assignment, and allocation of costs to DoD contracts.

Section 820 also required DCAA (Defense Contract Audit Agency) to accept the contract auditing work of commercial auditors without further audit. That provision didn't last long as it was eliminated in the 2017 NDAA (Section 804).

The idea of a DCASB (Defense Cost Accounting Standards Board) was essentially a shot at the CASB (Cost Accounting Standards Board) for its inactivity for a long period of time. In fact, from 2011 until after President Trump was inaugurated, the Board did not meet once. That has since changed and it appears the CASB is once again active.

Not too many people thought the idea of a DCASB was a good idea. The Section 809 panel included a recommendation to eliminate it and DCAA forwarded a legislative proposals with that recommendation.

Perhaps the end is near for the DCASB. Section 834 of the Senate version of the 2020 NDAA seeks to repeal 10 USC 190, the Defense Cost Accounting Standards Board. Most likely, this provision will survive the Senate/House compromise committee deliberations.

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