XL EagleCAS (Cost Accounting Standards)
CAS stands for Cost Accounting Standards. The Cost Accounting Standards are a set of rules that control how certain contractors measure, assign, and allocate costs to government contracts. They are issued by the Cost Accounting Standards Board and appear in Title 48 of the Code of Federal Regulations.
CAS applies mainly to large negotiated contracts. Many contracts are exempt, including contracts with small businesses, firm-fixed-price contracts awarded with adequate price competition, and commercial item contracts. Covered contractors may need to file a Disclosure Statement describing their accounting practices.
Why it matters to a small contractor
As a small business, you are generally exempt from CAS. But if you subcontract on a large cost-type contract, the prime may ask about your accounting system. Simple, consistent bookkeeping that separates direct and indirect costs will make you a more attractive partner.
Example
A small engineering firm is asked by a large prime whether it is CAS covered. Because it is a small business, the firm confirms the small business exemption in writing.
CAS: common questions
Are small businesses exempt from CAS?
Yes. Contracts and subcontracts with small businesses are exempt from CAS coverage.
What is the difference between CAS and GAAP?
GAAP governs general financial reporting. CAS governs how costs are allocated to government contracts and can be stricter on consistency.
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