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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: July 3, 2003

SUBJECT: Federal Acquisition Regulation (FAR); Cost Accounting Standards Administration

SOURCE: Federal Register, July 3, 2003, Vol. 68, No. 128, page 40105

AGENCIES: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA)

ACTION: Proposed Rule

SYNOPSIS: It is proposed that FAR Part 30, Cost Accounting Standards Administration, be revised to delineate the process for determining and resolving the cost impact on contracts and subcontracts when a contractor makes a compliant change to a cost accounting practice or follows a noncompliant practice.

EDITOR'S NOTE: The Cost Accounting Standards (CAS) are 19 standards which apply to large contractors performing large contracts. The CAS are in Chapter 99 of Title 48 of the Code of Federal Regulations (CFR).

For more on the earlier proposed rule, see the April 18, 2000, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Cost Accounting Standards Administration."

DATES: Comments should be submitted on or before September 2, 2003.

A public meeting will be held on August 5, 2003, at 9:00 a.m. to 5:00 p.m., EDST.

ADDRESSES: Submit written comments on proposed rule to General Services Administration, FAR Secretariat (MVA), 1800 F Street, NW, Room 4035, Attn: Laurie Duarte, Washington, DC 20405. Submit e-mail comments to: farcase.1999-025@gsa.gov. Cite "FAR case 1999-025" when referring to this proposed rule.

The public meeting will be held at Crystal Mall 3, 1931 Jefferson Davis Highway, Room C-43, Arlington, VA, 22202.

FOR FURTHER INFORMATION CONTACT: Edward Loeb, 202-501-0650.

SUPPLEMENTAL INFORMATION: FAR Part 30, Cost Accounting Standards Administration, describes policies and procedures for applying the CAS Board (CASB) rules and regulations to negotiated contracts and subcontracts that are not exempted by 48 CFR 9903.201-1, CAS Applicability (such as contracts awarded to small businesses, contracts for commercial items, competitive firm-fixed-price contracts awarded without cost or pricing data).

The CASB has felt, at least since 1995 when it began working on the subject, that the government does not implement in a uniform manner the administrative process for making contract price and cost adjustments resulting from contractor changes in a cost accounting practice, and that the procedures and processes are not widely understood or adequately documented.

On April 18, 2000, a proposed FAR revision was published which attempted to clearly delineate the entire cost-impact process the government and the contractor must follow when a contractor makes a compliant change to a cost accounting practice or fails to comply with a CAS. Nine respondents submitted public comments, and additional comments were provided by the public at public meetings held on August 2, 2000, September 26, 2000, and October 17, 2000. As a result of the comments, this proposed rule has been drafted, and its primary focus is the complete revision of FAR Subpart 30.6, CAS Administration. This proposed rule differs significantly from the April 18, 2000, proposed rule.

The following are the contents of the proposed FAR Subpart 30.6:

     30.601Responsibility
     30.602Materiality
     30.603Changes to Disclosed or Established Cost Accounting Practices
     30.603-1Required changes
     30.603-2Unilateral and desirable changes
     30.604Processing Changes to Disclosed or Established Cost Accounting Practices
     30.605Processing Noncompliances
     30.606Resolving Cost Impacts
     30.607Subcontract Administration

Among the most significant changes this proposed rule would make to the FAR are:

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2003 by Panoptic Enterprises. All Rights Reserved.

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