• Test 1

Cost Accounting Standards and Disclosure

FAR Part 31.205 sets out for some 52 expenditure categories, those costs that are prescribed as, generally allowable, unallowable or expressly unallowable.  FAR Part 31.201 sets out the overriding requirements for costs to be:

(i)                  Reasonable

(ii)                Allocable and

(iii)               Relevant.

In addition FAR Part 30 sets out requirements for compliance with Cost Accounting Standard Board Regulations. These Regulations, when cross-referred within FAR Part 31, are applicable even if the Contractor is not CAS covered.

Cost accounting disclosure by UK defence contractors is normally made via a QMAC and a QMAC supplement filed with MoD CAAS. Audit of these declarations would normally be carried out by MoD CAAS and reported to DCMA. If a contractor has not filed a QMAC and supplement then a US CASB DS-1 may be appropriate and required. Dor the updated QMAC format (downloaded here) the Supplement is included at the optional Schedule 10.

UK contractors are required to comply with CAS 9903.401 and 402 plus those standards where detailed requirements are referenced within FAR Part 31.

The standards are mandatory for use by all executive agencies and by contractors and subcontractors in estimating, accumulating, and reporting costs in connection with pricing and administration of, and settlement of disputes concerning, all negotiated prime contract and subcontract procurement with the United States in excess of $650,000, provided that, at the time of award, the contractor or subcontractor is performing any CAS-covered contracts or subcontracts valued at $7.5 million or greater.