“SMALLTOFEDS” By Ken Larson
“Small businesses consistently encounter The Federal Acquisition Regulation (FAR) and Cost Accounting Standards (CAS) requirements upon entering or growing into federal government contracting.
A basic understanding of FAR and CAS is necessary to manage government contracts as well as design business process approaches to meet the requirements.”
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“Small businesses consistently encounter FAR and CAS requirements upon entering or growing into federal government contracting. The purpose of these standards is to supply uniform regulatory guidance to all companies doing business with the government and to the agencies that buy from them.
The CAS apply to consistency in estimating, pricing, job cost accounting, billing and closeout of financial date under the contracts for supplies and services regulated by the FAR.
FAR and CAS are not “Rocket Science” but they are different than the commercial business sector.
HOW TO DETERMINE WHAT FAR AND CAS MEAN TO YOU
No one ever reads the full body of FAR and CAS from cover to cover. They are reference documents, maintained by the government to oversee the contracting process. From time to time changes to the regulations are offered for public comment at the FAR web site.
Such changes are more common in the FAR than in CAS. The CAS have been constant for several years and are not as dynamic as the detail processes in the FAR.
The below table contains the principle FAR chapter titles and each of the 19 CAS clauses. Linked below the table are the web sites that can be utilized to explore these documents.
PLEASE CLICK IMAGE TO ENLARGE
Determine the regulation basics that apply to any given job considered for bidding. Examine a few solicitations in your area of expertise at the SAM web site: SAM Contract Opportunities
Glance through the terms and conditions of a given solicitation and note the FAR and CAS requirements sited. Use the links to the FAR and CAS web sites as source documents to read in detail the clauses you must understand to effectively bid the job .
CAS
Cost Accounting Standards Web Site
Small businesses are generally required to meet modified CAS coverage. The business system meets Modified Cost Accounting Standard (CAS) Coverage defined by the government is as follows:
Standard 9904.401, Consistency in Estimating, Accumulating, and Reporting Costs
Standard 9904.402, Consistency in Allocating Costs Incurred for the Same Purpose
Standard 9904.405, Accounting for Unallowable Costs
Standard 9904.406, Cost Accounting Standard―Cost Accounting Period
Modified, rather, than full, CAS coverage may be applied to a covered contract of less than $50 million awarded to a business unit that received less than $50 million in net CAS-covered awards in the immediately preceding cost accounting period.
The following article contains practical business system guidance regarding building a Modified CAS Coverage Small Business System for federal government contracting:
If you have confusion regarding interpreting a requirement, seek assistance in the table of contents to the free book at this site offering guidance under the topic in question.
SUMMARY
While assessing the impact of FAR and CAS on your company educate yourself on that what directly affects your company first in making the transition to federal government contracting and growing into the field.
Carefully maximize your existing business processes and systems first before making changes and do not jump to instant fixes with exotic software tools a supplier or consultant has told you will make you compliant or competitive overnight in government contracting.
FAR and CAS are generally logical bodies of regulation that have come about due to the need to control and make consistent the government and industry approaches to meeting prudent and sound contracting objectives with the necessary transparency to govern.
FAR and CAS do not impose business systems. They do require that you disclose the way you meet regulatory requirements in the way you operate with your processes and tools. Plan the approach and learn to convey it to auditors, contracting officers and industry partners.
Grow into the business by exploring the venue and having it grow into you.”
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