30.604
Processing changes to disclosed or established cost accounting practices
FAR 30.604 requires contractors to promptly notify and provide detailed cost impact proposals for any changes to cost accounting practices, with strict procedures and remedies for noncompliance.
Overview
FAR 30.604 outlines the procedures for processing changes to disclosed or established cost accounting practices for CAS-covered contracts. It applies to required, unilateral, and desirable changes, and details the steps contracting officers (CFAOs) and contractors must follow when such changes occur. The regulation establishes requirements for submitting and evaluating notifications, general dollar magnitude (GDM) proposals, and detailed cost-impact (DCI) proposals, as well as calculating and negotiating cost impacts. It also provides remedies if contractors fail to comply with submission requirements.
Key Rules
- Scope and Applicability
- Applies to all required, unilateral, and desirable changes in cost accounting practices for CAS-covered contracts.
- Notification and Review
- Contractors must notify the CFAO of changes and provide a description; CFAOs review for adequacy and compliance.
- Proposal Submission
- Contractors may be required to submit a GDM or DCI proposal detailing the cost impact of the change.
- Evaluation and Negotiation
- CFAOs evaluate proposals, negotiate adjustments, and determine if changes are desirable or unilateral.
- Cost Impact Calculation
- Cost impacts must be calculated for all affected contracts and subcontracts, using specified methods and including incentives, fees, and profits.
- Remedies for Noncompliance
- CFAOs may withhold payments or unilaterally adjust contracts if required information is not provided.
Responsibilities
- Contracting Officers (CFAOs): Review notifications, request and evaluate proposals, negotiate cost impacts, determine desirability of changes, and enforce remedies for noncompliance.
- Contractors: Notify CFAOs of changes, submit adequate descriptions and required proposals, provide supporting data, and identify affected contracts/subcontracts.
- Agencies: Oversee compliance and ensure equitable adjustments are made as required.
Practical Implications
- Ensures transparency and fairness in cost accounting changes affecting government contracts.
- Impacts contract pricing, incentives, and government costs.
- Noncompliance can result in payment withholdings or unilateral contract adjustments, making timely and accurate submissions critical.