Redstone Government Consulting Blog

As Kevin so aptly put it in Home Alone 2 – “Another Christmas in the trenches.”

The FAR Council issued a proposed rule on November 29, 2024 to amend the FAR to increase acquisition related thresholds for inflation.

Again, this year our friendly DCAA auditors have taken up the government requirement to calculate and publish annually the new compensation cap as provided for in Section 702 of the Bipartisan Budget Act of 2013 (BBA; Pub. L. 113-67), dated December 26, 2013. The 2025 compensation cap amount is $671,000. Below we have provided the compensation caps going back to 2019.

Unanet provides a comprehensive suite of features tailored to help government contractors efficiently manage people and projects. These features are designed not only to enhance cost control and profitability but also to improve overall performance while ensuring compliance with complex government regulations. At Redstone GCI, we’ve seen firsthand how proper implementation of Unanet can streamline operations, significantly reducing processing costs compared to outdated or manual systems. With its robust capabilities, Unanet is built to meet the stringent requirements of federal government timekeeping and expense reimbursement, making it a valuable tool for contractors aiming to maintain compliance and improve operational efficiency. Our team specializes in helping government contractors unlock the full potential of Unanet, ensuring it is implemented and utilized effectively to deliver maximum value.

As a government contractor, ensuring compliance with employment law regulations is not only a legal requirement but also a crucial element in protecting your business from significant financial and legal risks. While employment law compliance might seem straightforward, the complexities of frequent updates and variations across jurisdictions make it a challenging task to manage. In this post, we’ll explore why employment law compliance is vital, the risks of non-compliance, and how you can protect your business with a comprehensive solution.

The Government wants to pay a fair and reasonable price for products and services that they purchase and expects you to pay your suppliers a fair and reasonable price. FAR 52.244-5 Competition in Subcontracting includes the requirement to select subcontractors and suppliers on a competitive basis to the maximum extent possible. What happens when you receive only one bid or there is only one source that can perform the effort? Well, the purchase becomes sole source – and yes, the requirements have just increased significantly. If the purchase exceeds the micro-purchase threshold, yes $10,000, you must document the justification as sole source. While it sounds pretty simple, for example, when the customer directs a part to be purchased from a specific supplier, you just check the box “customer directed” and move on. Oh, if that were only the case. Even when a purchase is customer directed, more documentation is necessary. It is never as easy as checking a box. When you are directed to buy from a supplier, you must still document the price is fair and reasonable. If the price is not fair and reasonable, it is your job to inform the government.

Both the Federal Acquisition Regulations (FAR) used by Federal Agencies to acquire products and services to support their operations and 2 Code of Federal Regulations (CFR) 200 used by Federal Agencies for grants to support Federal programs set forth requirements that the organizations awarded contracts or grants have an established purchasing/procurement systems. Before getting a procurement under a grant, you must determine if any lower-tier organization is either a subrecipient or a contractor (read more in this article, “Understanding your Lower-Tier Relationships with Subrecipient and Contractor Determinations under 2 CFR 200.” In this article, we are only dealing with contractors under 2 CFR 200 and subcontractors under the FAR.

Normally, I make numerous references to the Federal Acquisition Regulations (FAR) when writing. However, there is only one FAR reference for this topic, and then we must turn to the Accounting Standards Codification (ASC). In this case, that single FAR reference is FAR 31.201-2(a)(3).

CAS 411 provides criteria for accounting for the measurement and assignment of material costs to cost objectives and follows generally accepted accounting principles (GAAP).

What is the Purpose of CAS 411?

If you don’t have contracts subject to full CAS, then FAR 31.205-26 Material costs requires contractors to implement GAAP when accounting for material. Material costs can either be charged direct to a contract or assigned to contracts through inventory accounts. Material that is charged direct should be identified on the purchase order and material assigned through an inventory account should be consistently applied by category of material. While CAS 411 requires written policies for accounting for material, it is a best practice to establish written policies whether CAS 411 is applicable or not.

On October 15, 2024, the Department of Defense (“DoD”) published the final rule of the Cybersecurity Maturity Model Certification (“CMMC”) requirements in Title 32 of the Code of Federal Regulations, effective December 16, 2024. The Final Rule updates DoD national security regulations to ensure contractors have implemented cyber security measures to safeguard Federal Contract Information (FCI) and Controlled Unclassified Information (CUI). CMMC will be contractually required when the Defense Federal Acquisition Regulation (“DFARS”) clause has not been finalized (see our article, “DoD Issues CMMC Proposed Rule – Submit your comments by October 15, 2024”). We will refer to this DFARS clause throughout this blog as the DFARS CMMC Clause Final Rule.