When preparing that Cost Accounting Standards (CAS) Disclosure Statement needs some discussion and interpretation. When we polled our audience recently about their response to these questions, 60% said “as soon as the contract starts” and 40% said, “in the next fiscal year”.  We went to the guidance from DCAA for answers.

CAS Disclosure
CAS Coverage
Technically, any CAS-covered contract of $50 million or more always requires a disclosure statement before the contract award.  Most contractors that are not currently CAS covered when they submit such a bid, will not comply with this requirement.  But, initial disclosure statements are usually required before the contract award.  Look to the solicitation for clarification on this. If the requirement is in the solicitation and it would be an initial disclosure statement on a $50 million+ CAS-covered award, then submit it at the time the proposal is due.

Filing a Disclosure Statement
When a CAS-covered award under $50 million is involved, the disclosure statement filing requirement is based on the net awards received in the most recent prior cost accounting period.  In this case, contractors must submit disclosure statements if the company/business unit received net CAS-covered awards totaling more than $50 million.  If the filing is based on prior period net CAS awards, the contractor is not required to file until the end of the 90 days if the first CAS-covered award is received within 90 days of the start of the cost accounting period.

You can see that both responses could be right. It depends upon the organization’s situation and the timing. For more information on the subject of CAS go to the DCAA Audit Manual Chapter 4 and also see the CAS Applicability and Disclosure Statement Determination flow chart.  DCAA has audit responsibility and makes recommendations to the administrative contracting officer on each CAS Disclosure Statement.

There is no substitute for good cost accounting regardless of the need for a CAS Disclosure Statement. Always consult the FAR, DCMA Manual, and DCAA Contract Audit Manual as your sources of information.

For more on this topic see the Defense Contract Management Agency Manual 2201-02  https://www.dcma.mil/Policy/

Marsha Lindquist
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