OMB Raises Cost Accounting Standards Thresholds, Clarifies IDC Rules
For contractors near the line, the new numbers mean the difference between CAS-covered and exempt, and the IDC guidance answers a question that's been unsettled for years.
TL;DR
OMB's Cost Accounting Standards Board published a final rule increasing CAS monetary thresholds and clarifying how exemptions apply to indefinite delivery contracts. Contractors whose negotiated contract values previously triggered CAS coverage may now fall below the updated thresholds. The IDC clarification addresses whether exemptions are evaluated at the task-order level or against aggregate contract value, a distinction that determines whether a contractor faces CAS compliance obligations at all. The rule also increases agency waiver authority thresholds.
The Office of Management and Budget published a final rule Tuesday increasing the monetary thresholds that determine whether a federal contractor is subject to Cost Accounting Standards, and clarifying how those thresholds and exemptions apply to indefinite delivery contracts.
The CAS threshold for determining tentative applicability at the contract level is set by statute, 10 U.S.C. 3702(a)(1)(A), adjusted for inflation under 41 U.S.C. 1908. The rule updates those inflation-adjusted figures. For contractors operating near the prior thresholds, the change determines whether negotiated contracts trigger full CAS coverage, modified coverage, or no CAS obligation at all.
The IDC clarification addresses a structural ambiguity that has practical consequences for compliance teams. Indefinite delivery contracts establish a ceiling value, but actual obligations accrue through individual task orders. Whether CAS applicability is measured against the aggregate ceiling or on a per-order basis can mean the difference between a contract being covered or exempt. The rule provides guidance on which approach governs.
The final rule also raises the dollar threshold for agency-level CAS waivers, expanding the set of contracts that can receive a waiver without escalation to the Board.
The rule does not alter the underlying cost accounting standards themselves, nor does it change how cost impacts are resolved or how disclosure statements are filed. It is a threshold-and-applicability update, narrow in scope, but binary in effect for contractors whose contract values sit near the line.
Published ·Deep Fathom