Tenace

There are three specific criteria for what constitutes a Cost Accounting Practice change:

1. Required Change: If there is a new law in effect that requires a change, you need to comply with the law.

2. Unilateral Change: If it is a request from your contracting officer or from the government itself, they have to reimburse you for any increased costs resulting from that.

3. Voluntary Change: If you, as the company, want to make a change and the government does not find it to be desirable, then they have the right to only reimburse you up to what it would have cost them under the old practice.

There are a few more steps typically involved with voluntary changes, but the bottom line is that changes are allowed. They just need to be compliant and well-documented.

If you are considering changing a Cost Accounting Practice and are unsure how to navigate the process, we can help.

We put together answers to the most common Incurred Cost Submission (ICS) questions we get from clients. Swipe through to see if yours is covered.

If you are feeling overwhelmed by the process, we're here to help.

At Tenace, we help our government-contractor clients prepare for ICS throughout the year, ensuring everything is ready when the deadline arrives.

Here's a quick myth in the gov-con world: CAS only applies to large businesses.

Reality: Even though small businesses are exempt from CAS, many of the same principles still apply through FAR Part 31 cost principles.

For example, FAR 31.203, Indirect Costs, requires contractors to accumulate indirect costs in logical groupings and allocate them to cost objectives using a base that best represents the beneficial or causal relationship of the pooled costs to the cost objectives.

This language mirrors the same causal-beneficial allocation principle embedded on CAS 418, Allocation of Direct and Indirect Costs.
This means that even on non-CAS covered contracts, contractors are still expected to:
• Accumulate indirect costs in logical cost pools
• Allocate those costs using a representative allocation base
• Apply those practices consistently

One of the key objectives of CAS ultimately comes down to one word: Consistency.
If a contractor treats a cost one way today, the government expects it to be treated the same way tomorrow.
That doesn't mean you are not allowed to make changes (but we'll cover cost accounting practice changes in a future post).

Our recommendation to growing government contractors: don’t fear CAS. Instead, operate like the principles already apply.