The Cost Accounting Standards (CAS) Board convened on July 2, 2025 to advance its ongoing efforts to modernize federal cost accounting rules and align them more closely with commercial practices. The board’s agenda informs the public of upcoming monthly meetings. While several agenda items are familiar to those following the CAS Board’s activities during 2024, other agenda items go further back to the Section 809 Panel recommendations from June 2018. The Section 809 Panel was established under Section 809 of the 2016 National Defense Authorization Act to streamline and modernize the acquisition process.
Key Highlights From the Agenda Items
- Statutory CAS Thresholds
The board will discuss the potential decoupling of the monetary threshold for CAS applicability from the threshold for Truth in Negotiations Act (TINA) applicability, currently at $2 million. This also includes consideration to raise this basic threshold for CAS applicability and to eliminate the requirement for at least one contract at a minimum value, sometimes referred to as a “trigger contract,” currently valued at $7.5 million and not otherwise exempt from CAS.
This aligns with the Section 809 Panel’s recommendations based on an evaluation of contract data from 2012 through 2016, which calculated that raising the basic threshold from $2 million to as high as $25 million would result in 70% fewer contracts subject to CAS, with only an 8% reduction in the amount of contracting dollars subject to CAS. - Regulatory CAS Thresholds
Following decoupling the statutory threshold from the TINA threshold, the board will consider proposed rulemaking to raise the threshold for full CAS coverage, currently at $50 million. It is worth noting that the agenda cited the Section 809 Panel as the approach and recommendation that the board will consider. - Progress on GAAP Conformance
The board will review and resume deliberations on its multiyear initiative to assess and align CAS with GAAP where practicable. This effort continues the proposed rulemaking process for CAS 404, 408, 409, and 411, and picks up three additional standards for consideration in conformance to GAAP with CAS 407, 415, and 416. The board will work to issue a final rule addressing updates to revenue and lease accounting stemming from GAAP changes and signaled accelerated efforts on conformance to reduce unnecessary transaction costs for contracting parties. - Cost Impact of Accounting Changes
The board will discuss potential options as the Federal Acquisition Regulatory (FAR) Council develops a regulatory deviation to streamline FAR Part 30 CAS Administration, including the administration of cost accounting practice changes. This may be of interest to contractors and cognizant federal agency officials to gain clarity on what constitutes increased costs in the aggregate from unilateral cost accounting practice changes. - Application of CAS to Indefinite Delivery Vehicle (IDV) Contracts
The board will review options and identify a path forward for clarifying the application of CAS to IDVs, such as hybrid contracts with separately funded elements of varying contract types and indefinite delivery/indefinite quantity contracts with award values stated in variable terms of minimum and maximum amounts. This will continue the proposed rulemaking following receipt of public comments in June 2024.
As the CAS Board accelerates its work on GAAP conformance and threshold reform, its actions are increasingly aligned with the federal government’s broader goals of reducing transaction costs, enhancing competition, and making the acquisition system more agile and inclusive.
These efforts strongly reflect the recommendations of the Section 809 Panel, which called for streamlining CAS, eliminating outdated standards, and increasing thresholds to encourage broader participation in federal contracting. The board’s explicit reference to the panel’s guidance in its agenda underscores a welcome responsiveness to expert and industry input.
As a member of the committee that developed the Section 809 Panel’s CAS recommendations, Steve Trautwein with Forvis Mazars Government Contract Consulting noted that the board’s agenda “signals a long-overdue modernization of CAS that balances accountability with efficiency. The incorporation of Section 809 Panel recommendations is a clear sign that the government is listening to both practitioners and policymakers.”
If you have any questions or would like more information on government contracting, please reach out to a professional at Forvis Mazars.