FAR and CAS Intersection

There is always a discussion looming in the corners of every government cost accounting conference or training session about the linkages between FAR and CAS.  Most of the banter includes phrases like “but I don’t have CAS-covered contracts” or “I am only subject to modified CAS coverage.”  I do want to take a minute before going too deeply into this topic to admit I am not a Cost Accounting Standards expert, but I have done my research and was fully indoctrinated by the DCAA to understand them enough to be “dangerous.”

Somewhere along the way, I was presented with a chart that showed how CAS and FAR “played” together in the grand scheme of things.  I remember sitting in complete awe as I realized that FAR (to which all government contractors are held responsible) could be far more powerful when supported by laws such as CAS.  Then, over the course of the next 6 years, I lost track of the graphic.  Then, as I browsed my LinkedIn groups, I saw the topic manifest itself and dug out this graphic I put together within the last 6 months or so that I hope can be helpful for all of you.  The discussion on LinkedIn went like this:

If we are Modified CAS covered, why and how does FAR31.205.6 J force us to be compliant with CAS 412 and 413 for the new pension…I don’t understand why, if the CAS decision tree states that if a gov’t contractor is modified CAS covered and thus under CAS 401, 402, 405, and 406, why and how does FAR31.205.6 supercede what CAS says and then force us to be compliant with so many other of the CAS sections? Why can’t we just say we’re exempt from CAS 412 and 413 because we are modified CAS?

So, my response was simple that CAS isn’t really the problem here in being held to the pension requirements and that FAR was the culprit, but hence the reason for this post and this graphic.  Enjoy!  Note:  FAR does NOT implement CAS 401 and 408 – I guess that could be the silver lining.

If you would like a larger version, feel free to contact Martin Herbert at mherbertiv@gmail.com OR govcontracting101@gmail.com.


About Marty Herbert

With 13 years of government contract administration, analysis, finance, and audit experience, I have established a firm baseline in ethics and a specialization in government contracts that has prepared me to become a subject matter expert in my field. I am currently working on enhancing government contracts management and compliance through workflow tools and product offerings - attempting to make the process proactive as opposed to reactive.
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