Effective May 10, 2012, the Department of Defense, General Services Administration, and National Aeronautics and Space Administration issued a Final Rule revising the threshold for Cost Accounting Standards (“CAS”) applicability.  This coincides with a CAS Board final rule published in December of 2011, changing the CAS threshold from $650,000, to “the Truth in Negotiations Act (“TINA”) threshold, as adjusted for inflation (41 U.S.C. §1908 and 41 U.S.C. §102(b)(1)(B).”  The TINA threshold is currently $700,000, and is required to be adjusted for inflation every 5 years.

The Final Rule raises the CAS applicability threshold from $650,000 to $700,000.  As a result, the amount “$650,000” is being changed to “$700,000” in FAR 30.201-4 and FAR 52.230-1 through 52.230-5.  Like the CAS Rule, the Final Rule also states that the threshold will be adjusted every 5 years to match the TINA threshold.

The CAS are a series of accounting standards applicable to negotiated, non-commercial contracts and subcontracts unless exempt under 48 C.F.R. § 9903.201.  Exemptions include certain fixed-price contracts, contracts under $7.5 million where the contractor has not been awarded any other contracts valued at or over $7.5 million, contracts to be executed and performed outside the United States, and contracts awarded to small businesses.