CAS compliance for Federal Business

Cost Accounting Standards (CAS):

Cost Accounting Standards (popularly known as CAS) are a set of 19 standards and rules promulgated by the United States Government for use in determining costs on negotiated procurements. CAS differs from the Federal Acquisition Regulation (FAR) in that FAR applies to substantially all contractors, whereas CAS applies primarily to the larger ones.



When CAS will be applicable to your enterprise:

• Your enterprise performs work for federal government customers
• Your enterprise may be subject to 'full' CAS coverage (required to follow all 19 standards) when you receive either one CAS-covered contract of US$50 million or more, or a number of smaller CAS-covered contracts totaling US$50 million
• Your enterprise may be subject to 'modified' CAS coverage (required to follow only Standards 401, 402, 405, and 406) when you receive a single CAS-covered contract of US$7.5 million or more
• Your enterprise may be exempt from CAS standards provided:
• Contracts awarded to small businesses are exempt from CAS, regardless of contract size
• Any contract less than US$7.5 million is exempt, provided the company has not been awarded a contract greater than US$7.5 million, and also any contract less than US$700,000 is always exempt
• Contracts for commercial items
• Contracts awarded under sealed bid procedures, or where "adequate price competition" was available (the latter meaning where at least two companies had the ability to bid and perform on a contract, even if only one bid was later received)
• Contracts where the price is set by law or regulation
• Contracts awarded to foreign governments
• Contracts awarded to foreign concerns (only the disclosure statement and CAS 401 and 402 apply in this case)

In general these cost accounting standards and compliance is synchronous with US GAAP for accrual accounting.