Basics of the Cost Accounting Standards
(Editor’s Note. We find most of our subscribers enjoy our in-depth articles on a single FAR cost principle or cost accounting standard. Many of our clients and subscribers believe they are currently or will soon have certain contracts covered by some or all of the cost accounting standards (CAS) where rather than reading detailed descriptions of each principle or standard, have asked for a short summary of the important aspects of the CAS so here it is. The following is intended to simplify the CAS so those contractors not acquainted with CAS can learn the basic fundamentals, determine their CAS status and obligations and establish the basis to learn more. Our source of information is a multitude of articles and texts we have both read and written over the years.)
The Cost Accounting Standards are a group of accounting rules that dictate how the costs of government contractors are measured, accumulated ,assigned to years and allocated to contracts. The CAS and its regulations and interpretations are issued by the CAS Board – an authorized, independent five-member board within the Office of Federal Procurement Policy. As originally promulgated in the early 1970s, CAS applied only to Department of Defense contracts where in 1988 the statute underlying the CAS was extended to apply CAS to all negotiated civilian agency contracts and then in 1995 was further extended to cover educational institutions.
