30.202-7 Determinations
Source: FAR 30.202-7 on acquisition.gov
FAR 30.202-7 requires contractors to submit accurate Disclosure Statements and respond promptly to adequacy and compliance determinations to ensure CAS and FAR Part 31 compliance.
Overview
FAR 30.202-7 outlines the process for determining the adequacy and compliance of a contractor’s Disclosure Statement under the Cost Accounting Standards (CAS). The section details the roles of auditors and the Cognizant Federal Agency Official (CFAO) in reviewing, assessing, and communicating the status of the Disclosure Statement, which describes a contractor’s cost accounting practices. The regulation ensures that contractors accurately disclose their cost accounting methods and comply with CAS and FAR Part 31 requirements.
Key Rules
- Adequacy Determination
- The auditor reviews the Disclosure Statement for accuracy, completeness, and currency, then reports findings to the CFAO. The CFAO determines if the statement adequately describes cost accounting practices and notifies the contractor of adequacy or requests revisions if inadequate. Notification should generally occur within 30 days of receipt.
- Compliance Determination
- After adequacy is confirmed, the auditor conducts a detailed compliance review against CAS and Part 31. The CFAO then determines compliance or addresses noncompliance, including requesting corrections for CAS issues and processing Part 31 issues separately.
Responsibilities
- Contracting Officers: Receive copies of adequacy notifications if the proposal triggers Disclosure Statement submission.
- Contractors: Must submit accurate, complete, and current Disclosure Statements and revise them if found inadequate or noncompliant.
- Agencies (CFAO/Auditor): Review, assess, and communicate adequacy and compliance determinations; request corrections as needed.
Practical Implications
- This section ensures transparency and standardization in cost accounting practices for CAS-covered contracts. Contractors must be diligent in preparing and updating Disclosure Statements, as delays or inadequacies can impact contract awards and compliance. Timely communication and correction of deficiencies are critical to avoid compliance issues and potential penalties.
(a) Adequacy determination.
(1) As prescribed by 48 CFR 9903.202-6, the auditor shall-
(i) Conduct a review of the Disclosure Statement to ascertain whether it is current, accurate, and complete; and
(ii) Report the results to the CFAO.
(2) The CFAO shall determine if the Disclosure Statement adequately describes the contractor’s cost accounting practices. Also, the CFAO shall-
(i) If the Disclosure Statement is adequate, notify the contractor in writing, and provide a copy to the auditor with a copy to the contracting officer if the proposal triggers submission of a Disclosure Statement. The notice of adequacy shall state that-
(A) The disclosed practices are adequately described and the CFAO currently is not aware of any additional practices that should be disclosed;
(B) The notice is not a determination that all cost accounting practices were disclosed; and
(C) The contractor shall not consider a disclosed practice, by virtue of such disclosure, an approved practice for estimating proposals or accumulating and reporting contract and subcontract cost data; or
(ii) If the Disclosure Statement is inadequate, notify the contractor of the inadequacies and request a revised Disclosure Statement.
(3) Generally, the CFAO should furnish the contractor notification of adequacy or inadequacy within 30 days after the CFAO receives the Disclosure Statement.
(b) Compliance determination.
(1) After the notification of adequacy, the auditor shall-
(i) Conduct a detailed compliance review to ascertain whether or not the disclosed practices comply with CAS and part 31, as applicable; and
(ii) Advise the CFAO of the results.
(2) The CFAO shall make a determination of compliance or take action regarding a report of alleged noncompliance in accordance with 30.605(b). Such action should include requesting a revised Disclosure Statement that corrects the CAS noncompliance. Noncompliances with part 31 shall be processed separately.