Cost Accounting Standard (CAS) 403 is one of the most consistently misunderstood standards within CAS. Why? Usually because it involves more than just the segment you reside in. It requires cooperation and communication between parent entities and their segments, government and commercial segments both. The purpose of CAS 403 is simple, “to establish criteria for […]
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CAS Accounting Services
Once a single award is CAS covered, a contractor’s universe changes. Contractors need to measure their readiness for the award of a CAS-covered contract.
Additionally, those contractors who are already CAS-covered have requirements for monitoring compliance ensuring that they bid, book, and bill costs consistent with their disclosed cost accounting practices.
Changes in cost accounting practices in a CAS covered environment bring with it the requirement for cost impact analysis. RKI can assist in navigating CAS including:
- Evaluation of readiness for a CAS covered award
- CAS applicability evaluation
- Administration of cost accounting practice changes, including cost impact analyses
- Evaluation of CAS compliance with specific Cost Accounting Standards
- Preparation/Revision of CASB Disclosure Statements
CAS Compliance Services
Our team is skilled and experienced in navigating CAS compliance and CASB Disclosures.
CASB Disclosure Statement
Cost Impact Analysis
CAS Readiness Reviews
Frequently Asked Questions
Our team is skilled and experienced in navigating CAS awards and the potential pitfalls that come with them.
- General business information;
- How you distinguish between direct and indirect costs and indirect allocation methodology;
- Depreciation and capitalization practices;
- Other costs and credits;
- Deferred compensation and insurance costs; and
- Home office expenses.
There are two types of CAS applicability coverage: Modified- and Full-CAS. Click here for an up-to-date guide issued by the Defense Contractor Audit Agency (DCAA) for determining whether your company/business or contract is subject to either Modified- or Full-CAS.
Note: submission of a CASB DS-1 is only required if your company/business or contract is subject to Full-CAS.
CASB DS-1 should not be submitted prior to Full-CAS coverage applicability, unless a solicitation your are pursuing specifically requires it. It is, however, prudent to have the Disclosure Statement prepared and ready (i.e., not submitted to the Government) if you anticipate future Full-CAS coverage.
- Disclosed practices not compliant with CAS.
- Disclosed practices not compliant with FAR.
- Actual practices of estimating costs not complaint with CAS.
- Actual practices of estimating costs not compliant with FAR.
- Actual practices for estimating costs not compliant with the practices disclosed in the Disclosure Statement.
- Actual practices for accumulating or reporting costs not compliant with CAS rules and regulations.
- Actual practices for accumulating or reporting costs not compliant with FAR.
- Actual practices for accumulating or reporting costs not compliant with the practices disclosed in the Disclosure Statement.
Upon filing and submission of your CASB DS-1 with your Administrative Contracting Officer (ACO) or Cognizant Federal Agency Official (CFAO), they will review for adequacy. Once the ACO or CFAO deems your Disclosure Statement adequate, a government audit agency will be prompted to audit the disclosed accounting practices through an initial Disclosure Statement audit within sixty (60) days. Moreover, your disclosed accounting practices may also be audited indirectly during:
- Proposal evaluations
- Estimating system surveys
- Certified cost or pricing audits
- Incurred cost audits
- Other DFARS Systems audits
If you have questions or concerns related to audits, an upcoming audit, or previous audit findings, please don’t hesitate to contact us.
There are many examples of CAS noncompliance. For illustrative purposes, below are a few very basic examples:
- Contractor uses a direct labor allocation base, as opposed to Total Cost Input (TCI) for its General & Administrative (G&A) expenses when direct labor is not an accurate cost input base representing the total activity of the business (CAS 410)
- Contractor excludes a subsidiary entity that it supports from its G&A allocation base (CAS 410, 403)
- Contractor charges procurement personnel as direct labor under some contracts, while treating them as indirect under others in like circumstances (CAS 402, 418)
- Contractor has significant design engineering and manufacturing expenses with different causal/beneficial relationships to final cost objectives that included in a single overhead pool (e.g., using a single overhead rate when two is warranted) (CAS 418)
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