Section 1826 of the FY 2026 National Defense Authorization Act shifts DoD treatment of nontraditional defense contractors from discretionary to mandatory exemptions from key cost and business system requirements. With no dollar threshold and rulemaking still pending, government contractors must evaluate timing, contract status, and downstream compliance implications.
Topics: Accounting System Compliance, Proposal Cost Volume Development & Pricing, Small Business Compliance, Contracts & Subcontracts Administration, DFARS Business Systems, DCAA Audit Support, Contractor Purchasing System Review (CPSR), Government Regulations, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR), Material Management & Accounting System (MMAS), Commercial Item Determination
In reference to the now outdated terminology “Multiple Personality Disorders” (now “DID” or Dissociative Identity Disorder), my focus is on two Government actions, the 2026 NDAA (National Defense Authorization Act) and the very recent EO (Executive Order), “Prioritizing the Warfighter in Defense Contracting.” Before getting into the substance of this blog, just to note that one can only hope that the proposed/legislated changes to improve the efficiencies and effectiveness of the procurement process (for the Department of War and more broadly the US Government) will actually succeed and not be just one more set of idealized and unfulfilled political promises.
Topics: Accounting System Compliance, Contracts & Subcontracts Administration, DFARS Business Systems, DCAA Audit Support, Government Regulations, Cost Accounting Standards (CAS)
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Recent statutory changes under the FY 2026 National Defense Authorization Act revise the applicability thresholds for the Cost Accounting Standards and limit certain post-award contract price adjustments. These updates affect how contractors evaluate fixed-price awards, accounting practice changes, and clause timing, as regulatory implementation is expected within 180 days of enactment.
Topics: Accounting System Compliance, Contracts & Subcontracts Administration, DCAA Audit Support, Government Regulations, Cost Accounting Standards (CAS)
On Sunday, December 7, 2025, Congress put out a compromise version of the 2026 National Defense Authorization Act (NDAA). There is a lot in this version, but I wanted to bring to your attention the exciting possible changes to the Cost Accounting Standards (CAS).
Topics: Accounting System Compliance, Contracts & Subcontracts Administration, Government Regulations, Export & Import, Cost Accounting Standards (CAS)
Revenue recognition is a very critical and highly scrutinized aspect of accounting for government contractors. Whether you're working on cost-plus contracts, time and materials, or firm fixed price agreements, how and when you recognize revenue can significantly impact your financial reporting and compliance with government regulations.
Topics: Accounting System Compliance, DCAA Audit Support, Government Regulations, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR)
How much do you know about DCAA and its oversight of your incurred cost proposals (ICP) and indirect cost rates? Would it help to understand what is done and why? Knowing what initiates a DCAA audit of an incurred cost proposal and maintaining a good system of internal controls can potentially keep you from audit.
Topics: Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support, Government Regulations, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR)
The now infamous NIH Guidance (NOT-OD-25-068) and Executive Order 14222 started us thinking. Is the Department of Defense (DoD) possibly the next domino to fall? After all, the DoD has a very large contract spend of $431.4 billion based on the Defense Spending by State, FY 2023 — Executive Summary. We looked to see if we could find data on how much of that spend is going to indirect costs (i.e., overhead). Surprisingly, the only data we could find is very dated. The data comes from the DoD Indirect-Cost Management Guide from October 2001 posted on the Defense Acquisition University (DAU) website. The guide states, “estimates made by the Defense Contract Management Command (DCMA), in conjunction with discussions with defense contractor top management on their DCMA Overhead Initiative, indicate[s] that indirect costs constitute approximately $90 billion of the $170 billion total DoD work in process at all defense contractor[s].” While not clear, our assumption is that this represents the 2000 or 2001 timeframe. Based on this, DoD is spending 53% of its appropriated funding on indirect costs. This means the average defense contractor has an approximate 100% indirect cost rate, covering overhead and general & administrative (G&A) costs. Based on recent experiences with our clients, we believe this is still a reasonable estimate of indirect cost on DoD contracts, if not a little higher.
Topics: Accounting System Compliance, Proposal Cost Volume Development & Pricing, DCAA Audit Support, Government Regulations, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR)
What is a Department of Defense (DoD) class deviation? It is a deviation from the Federal Acquisition Regulation (FAR) or Defense Federal Acquisition Regulation (DFARS) that affects more than one contract. They are issued by an authorized official and are used to deviate from the FAR or DFARS and offer flexibility in the acquisition process. Class deviations are supposed to be temporary. If the class deviation will become permanent, the Government is supposed to issue a proposed revision to the FAR or DFARS.
Topics: Contracts & Subcontracts Administration, System Award Management (SAM), Government Regulations, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR), Cybersecurity
The FAR Council issued a proposed rule on November 29, 2024 to amend the FAR to increase acquisition related thresholds for inflation.
Topics: Proposal Cost Volume Development & Pricing, DFARS Business Systems, Contractor Purchasing System Review (CPSR), Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR), Estimating System Compliance
FAR Part 36 - Construction and Architect-Engineer Contracts provides the direction to contracting officer on the expected processes and requirements around contracting for construction and Architectural and Engineering (A&E) services. Part 36 addresses construction and A&E separately and we have included some of the key areas below.
Topics: Accounting System Compliance, Proposal Cost Volume Development & Pricing, Government Regulations, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR), Commercial Item Determination, Federal Construction Contracting