Federal Acquisition Regulation - Brief Article

Program Manager, Jan, 2001

APPLICABILITY, THRESHOLDS, AND WAIVER OF COST ACCOUNTING STANDARDS COVERAGE

The Federal Acquisition Regulation (FAR) has been changed to revise dollar thresholds and waiver requirements related to the application of cost accounting standards (CAS) to negotiated government contracts. This change is one of a series of acquisition reform measures to remove government-unique contracting requirements. Deidre A. Lee, the Director of Defense Procurement, stated, 'This policy change will enhance DoD's ability to take advantage of the technology found in commercial companies and, at the same time, will help to increase competition for the products and services that DoD buys."

The changes to the FAR include implementation of a "trigger contract," whereby a business unit must receive at least one CAS-covered contract in excess of $7.5 million before CAS is applied to any contract of that business unit In addition, for those business units where CAS is applied, the change to the FAR increases the dollar threshold at which companies must comply with full CAS coverage requirements to $50 million. Prior to this change, contractors who received $25 million or more in awards of CAS-covered prime contracts and subcontracts were subject to full CAS coverage. The change also permits agency heads to waive the applicability of CAS under certain conditions. These changes were required by Section 802 of the National Defense Authorization Act for Fiscal Year 2000.

Cost accounting standards are rules and regulations designed to ensure uniformity and consistency in the measurement, assignment, and allocation of costs under government contracts. These changes permit a greater reliance on commercial practices where the government's interests are adequately protected. Today's action [Jan. 10, 2001] finalizes changes to the FAR that were published on an interim basis on June 6, 2000.

The General Services Administration (GSA) posts FAR changes to its Web site. Search for FAC 97-22, Item II, at http://www.arnet.gov/far/.> FEDERAL ACQUISITION REGULATION

DEFINITIONS

The Federal Acquisition Regulation (FAR) will be changed to clarify the applicability of definitions, eliminate redundant or conflicting definitions, and make definitions easier to find. The changes, published Jan. 10, 2001, with an effective date of March 12,2001, move the definitions of over 110 common terms to central locations in the FAR.

In some cases, multiple definitions of terms will still be required because of multiple definitions in the underlying statutes. For these cases, the FAR is being modified to include convenient cross-references. Also, the FAR Index is being modified to identify definitions and indicate the location of each definition.

Deidre A. Lee, the Director of Defense Procurement, believes these changes will "make the FAR more user-friendly by making definitions easier to find and apply."

The changes are part of the ongoing efforts of the Defense Acquisition Regulations Council and the Civilian Agency Acquisition Council to implement the President's direction to write regulations in plain language.

The General Services Administration (GSA) posts FAR changes to its Web site. Search for FAC 97-22, Item I, at http://www.arnet.gov/far/.>

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