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DCAA Issues (Mis)Guidance on Expressly Unallowable Costs

Client Alert | less than 1 min read | 02.23.15

On January 7, 2015, DCAA issued guidance to auditors for determining whether certain costs are "expressly unallowable" – and therefore subject to penalties – even when the regulations "do not state in direct terms that the cost is unallowable." This guidance, which is intended to "enhance" the equally troubling December 18 guidance to similar effect, is inconsistent with the CAS 405 definition of "expressly unallowable cost" (i.e., "a particular item or type of cost which, under the express provisions of an applicable law, regulation, or contract, is specifically named and stated to be unallowable") and will likely lead to confusion in the audit process and undoubtedly result in DCAA auditors assessing more penalties against contractors on dubious grounds.

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Client Alert | 2 min read | 07.15.26

CMMC Phase II Suspension Requires Reconsideration of Such Requirements in Solicitations

As discussed in more detail here, the U.S. Department of War (DoW) recently issued a memorandum (Memo 26-P-1023, dated July 13, 2026) directing the immediate suspension of Cybersecurity Maturity Model Certification (CMMC) Phase II requirements (Level I and II self assessments are still permitted). Significantly, the memo directs that “all pending and future CMMC implementation milestones across DoW solicitations and contracts are held in abeyance until further notice.” Moreover, the DoW issued a memorandum on implementing these requirements (available here), directing agencies to issue amendments removing CMMC Level 2 and 3 requirements from active solicitations “as soon as practicable.” Contractors should monitor the government’s compliance with this requirement and should be prepared, if needed, to file a bid protest to protect their rights....

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