DCAA has ended planned compliance audits for CAS 404, 408, 409, and 411 following their removal from CAS effective August 7, 2026. While standalone audits for these standards are being discontinued, government contractors should expect continued scrutiny of accounting practice changes, CAS 401 compliance, and disclosure statements through other DCAA audit activity.
Lynne Nalley, CPA
Lynne is a Director with Redstone Government Consulting, Inc. providing government contract consulting services to our clients primarily related to Commercial Item Determinations and support, Cost Accounting Standards, DFARS Business System Audits, Proposals, and Incurred Cost. Prior to joining Redstone Government Consulting, Lynne served in several capacities with DCAA and DCMA for over 35 years. Professional Experience Lynne began her career working with DCAA in the Honeywell Resident Office, Clearwater, FL in 1984. Lynne’s experience included various positions which involved conducting or reviewing forward proposals or rate audits, financial capability audits, progress payments, accounting and estimating systems, cost accounting standards, claims and disclosure statement reviews. She is an expert in FAR, DFARS, CAS and testified as an expert witness. Lynne assisted in drafting the commercial item guidance for DCAA Headquarters. Lynne was assigned as a Regional Technical Specialist where she provided guidance to 20 field offices on highly complex or technical issues relative to forward pricing, financial capability or progress payment issues. As an Assistant for Quality, she was involved in reviewing and ensuring audit reports were in compliance with policy and GAGAS as well as made NASBA certified presentations to the staff including but not limited to billing reviews, CAS, unallowable cost and progress payments. To enhance her experience in government contracting, Lynne accepted a position with DCMA in 2015 as part of the newly organized DCMA Cadre of Experts in the Commercial Item Group. This included performing reviews of prime contractor’s assertions and/or commercial item determinations as well as performing price analyses. Lynne was a project lead and later became a lead analyst where she engaged with the buying commands on requests and reviewed price analysis reviews performed by a team of 5 analysts. She also assisted the DCMA CPSR team relative to commercial items and co-instructed the Commercial Item Training presented to DCMA. Education Lynne earned a Bachelor of Science Degree in Accounting from the University of Central Florida. Certifications State of Florida Certified Public Accountant State of Alabama Certified Public Accountant Defense Acquisition Workforce Improvement Act (DAWIA) Level III- Auditing DAWIA Level III – ContractingRecent Posts
Topics: Accounting System Compliance, Proposal Cost Volume Development & Pricing, Incurred Cost Proposal Submission (ICP/ICE), Contracts & Subcontracts Administration, DCAA Audit Support, Government Regulations, Cost Accounting Standards (CAS), Material Management & Accounting System (MMAS)
DoD’s July 30, 2026, class deviation raises the Full CAS and Disclosure Statement thresholds to $100 million, changing how CAS coverage may apply to certain defense contracts. Government contractors should reassess CAS applicability, pending proposals, Disclosure Statement requirements, and ongoing audit activity to determine how the new thresholds affect current obligations.
Topics: Accounting System Compliance, DFARS Business Systems, Government Regulations, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR), Estimating System Compliance
The Department of War has suspended CMMC Phase II implementation while it reviews the program and seeks industry input on reducing compliance burdens. Government contractors should understand which requirements remain in effect, how active solicitations may change, and what the temporary pause could mean for assessment costs and future cybersecurity obligations.
Topics: Small Business Compliance, Contracts & Subcontracts Administration, DFARS Business Systems, Government Regulations, Cybersecurity, Manufacturing Operations Consulting, REAs, Claims & Terminations
Two new Executive Orders signal increased federal action around quantum innovation and post-quantum cryptography. For government contractors and new entrants, participation in these initiatives will require careful attention to funding structures, FAR changes, NIST requirements, and compliance expectations.
Topics: Contracts & Subcontracts Administration, DFARS Business Systems, Contractor Purchasing System Review (CPSR), Government Regulations, Federal Acquisition Regulation (FAR), Cybersecurity, Commercial Determination, Manufacturing Operations Consulting
Buy American Act compliance now requires closer review of component origin, domestic content thresholds, and contract-specific exceptions. For government contractors, the increased domestic content requirements and differences between FAR and DFARS make sourcing, supplier certifications, and documentation critical to supporting accurate compliance certifications.
Topics: Contracts & Subcontracts Administration, DFARS Business Systems, Contractor Purchasing System Review (CPSR), Government Regulations, Federal Acquisition Regulation (FAR), Material Management & Accounting System (MMAS), Commercial Determination, Manufacturing Operations Consulting
The Department of Defense (DoD) issued an advance notice of proposed rulemaking (ANPR) on July 2, 2026, Defense Federal Acquisition Regulation Supplement: Modifications to Printed Circuit Board Acquisition Restrictions (DFARS Case 2022-D-011) on prohibiting the acquisition of printed circuit boards (PCBs) from certain countries. DoD is requesting input from experts and industry to assist in the development and revision of DFARS. Comments are due August 31, 2026.
Topics: Contracts & Subcontracts Administration, DFARS Business Systems, Contractor Purchasing System Review (CPSR), Government Regulations, Export & Import, Federal Acquisition Regulation (FAR), Material Management & Accounting System (MMAS), Estimating System Compliance, Commercial Determination, Manufacturing Operations Consulting
The Office of Management and Budget (OMB) proposed that the 2 CFR 200 revisions would convert Uniform Guidance into government-wide grant regulation, with comments due July 13, 2026, and a proposed effective date of October 1, 2026. Government contractors, recipients, and subrecipients should assess how the changes may affect funding terms, subawards, procurement, payments, and cost principles.
Topics: Contracts & Subcontracts Administration, Contractor Purchasing System Review (CPSR), System Award Management (SAM), Government Regulations, Federal Acquisition Regulation (FAR), Grants & Cooperative Agreements (2 CFR 200), Commercial Determination
Reporting of Independent Research and Development (IR&D) projects on the Defense Technical Information Center (DTIC) portal is normally due no later than three months after the contractor’s fiscal year-end, both annually and upon project completion. However, the DTIC portal was offline from November 2025 until approximately April 20, 2026, due to cyber vulnerabilities. Despite the nearly six‑month outage, Defense Pricing, Contracting and Acquisition Policy (DPCAP) has provided contractors just over 30 days, until May 31, 2026, to enter all required IR&D information, including new projects, annual updates, and closed projects. This accelerated timeline contrasts with the DFARS allowance of up to three months after the fiscal year-end for reporting.
Topics: Accounting System Compliance, Incurred Cost Proposal Submission (ICP/ICE), Contracts & Subcontracts Administration, DFARS Business Systems, Defense Procurement & Acquisition Policy (DPAP), Government Regulations, Federal Acquisition Regulation (FAR)
OMB’s new guidance directs agencies to expand commercial acquisitions and justify non-commercial awards. Government contractors may see closer review of commerciality, pricing, option periods, and cost-reimbursement contracts, making support for market research and contract decisions more important.
Topics: Proposal Cost Volume Development & Pricing, Small Business Compliance, Contracts & Subcontracts Administration, DFARS Business Systems, DCAA Audit Support, Government Regulations, Federal Acquisition Regulation (FAR), Material Management & Accounting System (MMAS), Cybersecurity, Commercial Determination, Manufacturing Operations Consulting
In June 2023, the Armed Services Board of Contract Appeals (ASBCA) denied Honeywell's motion to dismiss a $151 million claim alleging improper G&A allocation treatment under CAS 410. The Board affirmed that interdivisional cost transfers must be included in a total cost input base, contradicting Honeywell's position. Government contractors should review whether their G&A allocation bases are consistent with this ruling.
Topics: Accounting System Compliance, Proposal Cost Volume Development & Pricing, Contracts & Subcontracts Administration, DFARS Business Systems, DCAA Audit Support, Government Regulations, Cost Accounting Standards (CAS)
