• Fall 2011 - Regulatory Updates
• Winter 2011 Regulatory Updates
• Winter 2010 Regulatory Updates
• Fall 2010 Regulatory Updates
• Spring 2010 Regulatory Updates

Proposal to Eliminate CAS Exemption for Foreign Contractors
The CAS board has proposed to remove the exemption from CAS coverage for all contracts and subcontracts which are “executed and performed in their entirety outside the United States.”  This would have a negative impact on United States prime contractors who subcontract with foreign companies for work outside of the United States.  Iraq and Afghanistan contracts and subcontracts are the most prevalent qualifying for this exemption, and are also places where CAS-compliant contractors are likely to remain scarce.  DCAA does not know whether the costs associated with applying CAS outside of the United States will justify whatever benefits CAS coverage could bring.  Federal Register Vol. 75, No. 202, dated Wednesday, October 20, 2010 invites public comments on the proposed rule.  

Cost Recovery Initiative
On October 29, 2010 the Defense Contract Management Agency (DCMA) and Defense Contract Audit Agency (DCAA) announced a joint initiative to disposition reportable audits, suspended/disallowed costs, cost accounting practice changes, and other cost allowability and allocability issues.  There are currently 400 reportable audits and 300 Form 1’s which are valued at $295 million.  The goal of this initiative is to recover taxpayer dollars and to clear the backlog of issues which will allow the Department of Defense and contractors to focus on current contracting challenges.

Afghan Security Ban
The Afghan government has announced it will enforce a ban on private security firms scheduled to take place December 17, 2010.  This could cause many contractors, who are in charge of millions of dollars worth of projects, to cancel their contracts due to their inability to work safely. The United States alone spends more than $3 billion on civilian development programs.    Despite pressure from numerous groups Afghan President Karzai believes that his forces have the ability to protect the contractors and will leave that responsibility with the Afghan Army and police.  Afghan President Karzai announced at a press conference that a special commission to be led by the Afghan Interior Minister will explore how to appropriately implement the private security prohibition.

Increased Thresholds for Price Proposal Audits
On October 18, 2010 the DFARS Procedures, Guidance and Information (PGI) was revised to limit contracting officers’ request for DCAA audit assistance to only Fixed-Price proposals exceeding $10 million and Cost-Type proposals exceeding $100 million, unless the contracting officer can justify the circumstances that would require a proposal audit for contracts that fall below the thresholds.  These revised thresholds do not apply to assist audit requests requested by another DCAA office.  Assist procedures which are requested below the PGI threshold shall continue to be completed using appropriate audit procedures for incorporation into the higher level audit report.

SBA Issues New Rules Regarding Women-Owned Small Business in Federal Contracting
On October 7, 2010 the Small Business Administration (SBA) issued its final rule to amend its regulations governing small business contracting procedures.  The rule will take effect in 2011 and allows contracting officers to limit competition for government contracts in 83 industries for Women-Owned Small Businesses (WOSBs) and Economically Disadvantaged Women-Owned Small Businesses (EDWOSBs) provided that they meet all the conditions.  Small Business Administration has launched the women's procurement program to help the federal government meet its statutory goal of awarding 5 percent of contract dollars to women-owned small businesses.

TINA Raises Threshold
Effective October 1, 2010 a FAR regulation regarding compliance with the Truth in Negotiations Act raised the threshold for providing certified cost or pricing data from $650,000 to $700,000 for covered contract and subcontract awards and modifications.  The Civilian Agency Acquisition and Defense Acquisition Regulations Councils say the new regulation will likely precipitate expanded and more aggressive contracting officer requests for non-certified judgmental data, even when certified cost or pricing data are required.