Contract clauses
FAR 30.201-4 mandates the inclusion of specific CAS clauses in negotiated contracts to ensure contractors disclose and consistently apply cost accounting practices, based on contract type and contractor status.
Overview
FAR 30.201-4 prescribes the specific Cost Accounting Standards (CAS) contract clauses that must be included in negotiated contracts, depending on the type of contractor, contract value, and other factors. It outlines when to use each clause (FAR 52.230-2, 52.230-3, 52.230-4, 52.230-5, and 52.230-6) and the obligations these clauses impose, such as compliance with CAS, disclosure of cost accounting practices, and consistency in applying those practices. The section also addresses special requirements for foreign concerns and educational institutions, and mandates the inclusion of an administration clause for contracts subject to CAS. The goal is to ensure transparency, consistency, and compliance in cost accounting for government contracts subject to CAS requirements.
Key Rules
- Cost Accounting Standards (CAS) Clause (FAR 52.230-2)
- Required in most negotiated contracts unless exempt, subject to modified coverage, or for foreign concerns/educational institutions. Mandates full CAS compliance and consistent cost accounting practices.
- Disclosure and Consistency (FAR 52.230-3)
- Used for contracts over $2.5M but under $50M with modified CAS coverage. Requires compliance with specific CAS standards and consistent disclosure of practices.
- Foreign Concerns (FAR 52.230-4)
- Used for negotiated contracts with foreign concerns (excluding foreign governments). Requires compliance with limited CAS standards and consistent disclosure.
- Administration of CAS (FAR 52.230-6)
- Included in any contract with a CAS clause. Specifies administration and compliance procedures.
- Educational Institutions (FAR 52.230-5)
- Used for contracts with educational institutions, with certain exceptions. Requires compliance with educational institution-specific CAS and disclosure requirements.
Responsibilities
- Contracting Officers: Must determine CAS applicability and insert the correct clauses based on contract type, value, and contractor status.
- Contractors: Must comply with applicable CAS, disclose cost accounting practices, and maintain consistency in those practices.
- Agencies: Oversee compliance, ensure proper clause inclusion, and administer CAS requirements.
Practical Implications
This section ensures that contractors subject to CAS are held to consistent standards for cost accounting, which supports fair and transparent pricing in government contracts. Contractors must be vigilant in determining which CAS clauses apply and in maintaining accurate, consistent cost accounting records. Failure to comply can result in administrative actions or contract disputes.