OFPP seeks public opinion on changes to CAS regulations regarding delivery vehicles with an indefinite delivery time | Schwabe, Williamson and Wyatt P.C

On Tuesday, June 18, the Office of Federal Procurement Policy issued a notice seeking public comment on whether and how to amend the Cost Accounting Standards Board rules that govern the application of Cost Accounting Standards (CAS) to commercial commercial vehicles (IDVs) indefinitely . Public comments are open until August 19, 2024 [email protected], referring to case 2021-01. The Board explains its rationale and approach in a summary published with the notice of request for public comment.

The CAS Board has exclusive authority to create, publish and amend standards and interpretations intended to achieve uniformity and consistency in cost accounting practices that govern the measurement, assignment and allocation of costs for contracts with the federal government. Codified at 48 CFR Chapter 99, the standards apply to agencies, contractors, and subcontractors in estimating, collecting, and reporting costs in connection with the pricing, administration, and resolution of disputes relating to certain negotiated prime contracts and subcontracts with the federal government. Contracts valued at less than $2,000,000 may be exempt from CAS as long as the contractor or subcontractor does not currently have any CAS contracts valued at $7.5 million or greater. CAS protection begins when a contractor receives a CAS-covered award of at least $7.5 million, and future contracts that might otherwise be exempt will automatically become CAS-covered.

The Board is considering when and how to apply CAS to IDV. These refer to procurement where a work order is awarded by placing individual job and supply orders as demand arises, with a minimum guaranteed order value and a cap reflecting the maximum total value of orders that can be placed under the order. IDVs may be awarded to a single contractor or to multiple contractors.

The CAS Board found that the lack of guidance on whether and how CAS apply to IDV results in an inconsistent approach. The Board is considering how to provide greater transparency, for example by identifying six potential approaches to providing CAS coverage for IDV:

1. 1. Order after order. Each task order and delivery would be treated as a separate contract, and CAS would apply only to those orders whose values ​​fall within the coverage thresholds. (This is the approach described above and recommended by the Section 809 Panel.)
   2. Maximum reward value. CAS would apply to all IDV contracts, regardless of contract value, if the maximum IDV amount meets coverage thresholds.
   3. Minimum prize value. CAS would not apply to any orders under the IDV unless the minimum guarantee amount met the CAS coverage thresholds, in which case CAS would apply to all orders.
   4. Cumulative threshold. CAS would apply when the cumulative value of contract awards exceeds the dollar threshold covered by CAS insurance. At this point, the current order and all subsequent orders issued will be covered by CAS.
   5. Order order for multi-reward IDVs and maximum reward value for single-reward IDVs. For multi-reward IDVs, each order will be treated as a separate CAS insurance contract (see alternative #1). For single-rated IDVs, coverage will be based on the maximum reward value (see alternative 2).
   6. Order by order for multi-reward IDV badges and total threshold for single-scored IDVs. For multi-reward IDVs, each order will be treated as a separate CAS insurance contract (see alternative #1). For single reward IDVs, CAS would apply when the cumulative order value exceeds the dollar threshold for CAS coverage. At this point, the current contract and all subsequent contract awards would be subject to CAS (see alternative 4).

The CAS Board seeks public comment “on the benefits and drawbacks of amending its policies to address IDV,” as well as additional evaluative considerations or alternatives it should consider.

This is an opportunity for federal contractors with IDVs to provide input to the Office of Procurement Policy before it develops any new regulations. Therefore, federal contractors with IDVs should consider how applying the CAS standards to IDVs will affect them and whether there may be issues or alternatives they would like the agency to consider.