Contract clauses
FAR 30.201-4 mandates the inclusion of specific Cost Accounting Standards (CAS) clauses in negotiated contracts based on contract type, value, and contractor status, ensuring consistent and transparent cost accounting practices.
Overview
FAR 30.201-4 prescribes the specific contract clauses that must be included in negotiated contracts subject to Cost Accounting Standards (CAS). It details which FAR clauses to use based on contract type, value, contractor status (domestic, foreign, educational institution), and CAS coverage (full or modified). The section ensures that contractors are held to consistent cost accounting practices, disclosure requirements, and administrative procedures, with different clauses tailored for standard commercial entities, foreign concerns, and educational institutions. Contracting officers are responsible for inserting the correct clauses and ensuring compliance with CAS requirements, while contractors must adhere to the standards, disclose their practices, and maintain consistency in cost accounting.
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 compliance with all CAS and consistent cost accounting practices.
- Disclosure and Consistency (FAR 52.230-3)
- Used for contracts over $2 million but under $50 million with modified CAS coverage. Requires compliance with specific CAS standards and consistent disclosure of practices.
- Foreign Concerns (FAR 52.230-4)
- Inserted in contracts with foreign concerns (excluding foreign governments). Requires compliance with limited CAS standards and consistent disclosure.
- CAS Administration (FAR 52.230-6)
- Included in any contract with CAS clauses to outline administration and noncompliance procedures.
- Educational Institutions (FAR 52.230-5)
- Used for contracts with educational institutions, with 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 the applicable CAS, disclose cost accounting practices, and maintain consistency.
- Agencies: Oversee compliance and enforce CAS administration procedures.
Practical Implications
- Ensures uniformity and transparency in cost accounting for government contracts.
- Contractors must be vigilant in identifying which CAS clauses apply to their contracts and maintain proper documentation.
- Failure to include or comply with the correct clause can result in noncompliance penalties or contract disputes.