FAR 52.230-2 — Cost Accounting Standards
Requires contractors to comply with applicable Cost Accounting Standards (CAS) on negotiated contracts over the CAS threshold.
When This Clause Applies
Required in negotiated (non-commercial-item, non-FFP) contracts over $2M when the contractor is otherwise subject to CAS. Modified CAS coverage applies to mid-tier; full CAS coverage to larger contractors.
What This Means for Contractors
Contractors must follow all 19 CAS (or applicable subset for modified coverage) consistently across all government contracts. CAS changes require Disclosure Statement updates and cost impact analyses. Noncompliance can trigger price adjustments equal to the cost impact of the noncompliance.
Common Pitfalls
- 1Failing to file a Disclosure Statement when crossing the trigger contract size
- 2Inconsistent application of cost accounting practices across contracts
- 3Not analyzing cost impact when changing practices
- 4Treating modified CAS as 'optional' — it's mandatory once triggered
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