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Another Salvo in the War for Control of Contractor "Systems" Approval

Client Alert | 1 min read | 08.20.10

In the "Report on Allegation of Unsatisfactory Conditions Regarding Actions by the Defense Contract Management Agency, Earned Value Management Center" (July 28, 2010 http://www.dodig.mil/Audit/reports/fy10/apo/D-2010-6-002.pdf), the DoD Inspector General recommended that the Defense Contract Management Agency "prohibit joint surveillance reviews or other joint activities with a contractor" in order to avoid compromising DCMA's "independence" and to take action to increase DCAA "participation" in Earned Value Management Systems audits. While DCMA did not concur in many of the recommendations in the IG report, if the IG recommendations were adopted they would inevitably be applicable to other contractor "systems" issues, make it more difficult for contracting officers to resolve systems issues raised by DCAA, and have a decidedly negative impact on compliance and contract administration activities in the procurement process.

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Client Alert | 1 min read | 07.08.26

CAS Board Publishes Final Rule Rescinding CAS 404, 408, 409, and 4117

As part of its ongoing effort to conform the Cost Accounting Standards (“CAS”) to generally accepted accounting principles (“GAAP”), the CAS Board published a final rule rescinding CAS 408 (Accounting for costs of compensated personal absence) and CAS 411 (Accounting for acquisition costs of material).  The CAS Board also rescinded CAS 404 (Capitalization of tangible assets) and CAS 409 (Depreciation of tangible capital assets) but retained certain requirements of CAS 404 and 409, which will be located in new paragraphs of CAS 405 (Accounting for unallowable costs).  Specifically, the CAS Board retained the requirements currently located at CAS 404-50(d)(1), CAS 409-50(e)(5), CAS 409-50(j)(1), and CAS 409-50(j)(4), which the CAS Board explained are necessary to protect the Government’s interests.  Otherwise, the CAS Board determined that the requirements of CAS 404, 408, 409, and 411 overlapped with GAAP such that GAAP “may be applied reasonably as a substitute for CAS to support contract cost and pricing.”...

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