Redstone Government Consulting Blog | Federal Acquisition Regulation (FAR)

Highlights

• Threshold Increase. The FY 2026 National Defense Authorization Act increases the Truthful Cost or Pricing Data threshold to $10 million for qualifying prime contracts and subcontracts entered into after June 30, 2026, marking a significant statutory change for negotiated procurements.
• Inflation Adjustment. An earlier update raised the threshold to $2.5 million, effective October 1, 2025, creating multiple thresholds that government contractors must track.
• Clause Timing. Contract award dates and clause language determine which threshold applies, particularly for contracts awarded prior to June 2020.
• Effective Dates. Statutory changes may apply before the FAR text is updated, requiring government contractors to understand when new thresholds become operative.
• Compliance Impact. The updates increase the importance of reviewing government contracts and subcontracts to ensure thresholds are applied consistently.

---

The Truthful Cost or Pricing Data Act (previously the Truth in Negotiations Act) and still referred to as TINA, was established to ensure the government was placed on a level playing field with contractors when negotiating non-competitive or sole-source contracts. TINA applies to both prime and subcontract negotiations. While the TINA threshold hasn’t changed since 2018, there have been two updates to the threshold in less than a 12-month period. This is a welcome surprise. However, government contractors need to understand the thresholds and which ones apply to their contracts and subcontracts.

Topics: Proposal Cost Volume Development & Pricing, Contracts & Subcontracts Administration, DFARS Business Systems, DCAA Audit Support, Government Regulations, Federal Acquisition Regulation (FAR), Estimating System Compliance

For the last few years, our friends at the Defense Contract Audit Agency (DCAA) have been very helpful by publishing the Contractor Compensation Cap in the December timeframe. This year, I am guessing that the Government shutdown has diverted their attention. To help our clients, we have calculated the 2026 amount of the cap.

Topics: Accounting System Compliance, Proposal Cost Volume Development & Pricing, Employee & Contractor Compensation, Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support, Human Resources, Government Regulations, Federal Acquisition Regulation (FAR)

On November 24, 2025, President Trump signed EO 14363, Launching the Genesis Mission to accelerate America’s race for global dominance in the application of AI to scientific discovery and scientific challenges.

Topics: Accounting System Compliance, Incurred Cost Proposal Submission (ICP/ICE), DFARS Business Systems, DCAA Audit Support, Government Regulations, Federal Acquisition Regulation (FAR), Grants & Cooperative Agreements (2 CFR 200)

On December 5, 2025, the Department of Justice (DOJ) reported another settlement under the False Claims Act (FCA) related to cybersecurity. Swiss Automation agreed to pay $421,234 to the Government as a result of failing to provide adequate cybersecurity controls for drawings of parts supplied to Department of Defense (DoD) prime contractors. The qui tam suit under the False Claims Act (FCA) was brought forward by a whistleblower, not an Information Technology (IT) employee, but a Quality Control Manager of the company. The whistleblower received $65,291.

Topics: Contracts & Subcontracts Administration, DFARS Business Systems, Contractor Purchasing System Review (CPSR), Government Regulations, Federal Acquisition Regulation (FAR), Material Management & Accounting System (MMAS), Cybersecurity, Commercial Item Determination

The Department of Defense (DoD) issued a final rule on September 10, 2025, amending the Defense Federal Acquisition Regulation Supplement (DFARS) to incorporate the requirements of the Cybersecurity Maturity Model Certification (CMMC) for FAR-based contracts and subcontracts, effective November 10, 2025.

Topics: Small Business Compliance, Contracts & Subcontracts Administration, DFARS Business Systems, Government Regulations, Federal Acquisition Regulation (FAR), Cybersecurity, Grants & Cooperative Agreements (2 CFR 200)

Closing out the year is an important step in your accounting cycle, and it should involve more than just “closing the books.” For government contractors, year-end is about ensuring your financials are accurate, compliant, and audit-ready, not just for tax purposes, but to support ongoing contract and regulatory requirements.

Topics: Accounting System Compliance, Small Business Compliance, Quickbooks, Federal Acquisition Regulation (FAR)

Department of Defense (DoD) issued a final rule on September 10, 2025, amending Defense Federal Acquisition Regulation Supplement (DFARS), incorporating contractual requirements under the Cybersecurity Maturity Model Certification (CMMC) program as part of the National Defense Authorization Act for FY 2020 to enhance cybersecurity for the US defense industrial base. The final rule is effective November 10, 2025.

Topics: Contracts & Subcontracts Administration, DFARS Business Systems, Government Regulations, Federal Acquisition Regulation (FAR), Cybersecurity

Just like all other business systems required for federal Government contract work, the Government property system requires compliant policies and procedures for an adequate system determination. While procedures are only a single part of a contractor’s property management system, they are the backbone of how the system should operate.

Topics: Contracts & Subcontracts Administration, DFARS Business Systems, DCAA Audit Support, Government Regulations, Government Property Management, Federal Acquisition Regulation (FAR)

Well, of course, The Department of Defense (DOD) can. The three most common situations where DoD requires cost data on a fixed price contract are:

Topics: Proposal Cost Volume Development & Pricing, Contracts & Subcontracts Administration, DFARS Business Systems, Government Regulations, Federal Acquisition Regulation (FAR)

Government contractors deal with a unique set of rules when it comes to expenses. FAR Part 31 lays out the specific guidelines on what you can and cannot charge to the government. If unallowable costs slip through, you could face compliance problems or see expenses disallowed in an audit.

Topics: Accounting System Compliance, Small Business Compliance, Quickbooks, Government Regulations, Federal Acquisition Regulation (FAR)