Cost Accounting Standards (CAS) are a set of 19 standards created by the United States Government to achieve consistency and uniformity in the cost accounting practices pertaining to government contracts.
What is CAS?
Cost Accounting Standards (CAS) in government contracting are a set of rules and regulations that establish uniform guidelines for the measurement, assignment, and allocation of costs to government contracts. These standards are designed to ensure consistency and fairness in the determination of contract prices and the proper allocation of costs.
The Cost Accounting Standards were originally developed by the Cost Accounting Standards Board (CASB), which is a regulatory body under the Office of Federal Procurement Policy (OFPP) in the United States. The CASB has the authority to promulgate, amend, and interpret these standards.
Where FAR applies to contractors of all sizes, CAS primarily applies to the largest contractors. CAS ensures that each type of cost is allocated only one time for each purpose.
The primary objectives of CAS are to:
- Promote consistency and uniformity in the estimation, accumulation, and allocation of costs incurred by contractors.
- Ensure that the government obtains reliable and consistent cost information from contractors for negotiation, award, and administration of contracts.
- Prevent contractors from shifting costs from one contract to another or from one accounting period to another.
- Establish criteria for determining allowable and unallowable costs on government contracts.
CAS applies to contractors and subcontractors that receive government contracts exceeding certain thresholds. These standards are primarily applicable to negotiated contracts, but they may also apply to some types of fixed-price contracts, as well as subcontracts under government contracts.
Compliance with CAS requires contractors to follow specific accounting practices and to disclose and justify any deviations from those practices. Contractors are also required to maintain adequate systems for tracking and allocating costs, as well as to submit cost impact proposals and disclosure statements when necessary.
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