How does the government determine if the contractor's costs are compliant?
The government must first determine if the contract is covered by the Cost Accounting Standards (CAS) that are issued by the Cost Accounting Standards Board (CASB). The CASB is made up of the Office of Federal Procurement Policy (OFPP) Administrator; a Department of Defense (DOD) representative; a General Services Administration (GSA) representative; two private sector representatives: one representing the industry and another with specific knowledge about problem areas.
For contracts covered by CAS, costs are subject to the measurement, assignment, and allocability provisions contained in 19 cost accounting standards. For contracts not covered by CAS, then the allocability provisions of FAR Part 31 applies. If the cost is not covered in FAR Part 31, then the Generally Accepted Accounting Principles (GAAP) apply. The 19 cost accounting standards are:
· Consistency in estimating, accumulating and reporting costs
· Consistency in allocating costs incurred for the same purpose
· Allocation of home office expenses
· Capitalization of tangible assets
· Accounting for unallowables
· Cost accounting period
· Use of standard cost systems
· Accounting for paid absence
· Depreciation of tangible assets
· Allocation of business unit G&A
· Accounting for acquisition costs of materials
· Composition and measurement of pension costs
· Adjustment and allocation of pension costs
· Cost of money as an element of facilities capital
· Accounting for deferred compensation
· Accounting for insurance costs
· Cost of money of capital assets under construction
· Allocation of direct and indirect costs
· Accounting for IR&D/B&P
Basic Member
Mary Ann Wangemann
1 CI INC
Expertise Expertise: 5
