The CAS Board’s Carrying Out a Mandate—And Comments Are Now Open

Why It Matters

The changes promise significant cost‑saving relief for many contractors while preserving federal oversight of the vast majority of procurement dollars, reshaping compliance strategies across the defense supply chain.

Key Takeaways

• New CAS thresholds raise exemption to $35M, full coverage to $100M.
• Board expects 30% fewer entities under full CAS, covering 99% of dollars.
• Disclosure‑statement threshold also raised to $100M, eliminating 30% segment exemption.
• Indefinite‑delivery contracts get split treatment: order‑level for multi‑award, ceiling‑level for single‑award.
• Industry may seek off‑ramp for existing contracts below new thresholds.

Pulse Analysis

Since the 1970s, Cost Accounting Standards have been a cornerstone of federal contract oversight, but their prescriptive nature has long set government contractors apart from commercial firms. The 2026 National Defense Authorization Act (NDAA) signaled a shift toward deregulation, prompting the CAS Board to propose higher thresholds that align more closely with GAAP and reduce administrative load. By raising the exemption level to $35 million and full‑coverage to $100 million, the board targets a 30 percent reduction in entities subject to the full suite of 19 standards, yet still captures nearly all federal spending, preserving transparency while easing compliance.

The draft rule also revises the disclosure‑statement threshold, moving it to $100 million and scrapping the 30 percent segment exemption that previously allowed certain sub‑segments to avoid reporting. This streamlines reporting requirements and eliminates redundant exemptions, ensuring that high‑value contracts remain fully visible to auditors. Additionally, the board addresses indefinite‑delivery contracts by differentiating treatment: multi‑award contracts will be evaluated at the order level, whereas single‑award contracts will continue to be assessed against the overall ceiling. This nuanced approach reflects real‑world ordering patterns and aims to prevent unnecessary burden on contractors handling numerous small orders.

Stakeholders now have until April 20 to comment, and many are urging the board to introduce an "off‑ramp" that would let contracting officers modify existing contracts falling below the new thresholds, thereby retroactively easing compliance. Such a mechanism could harmonize CAS reforms with broader FAR and Defense Acquisition Regulation Council initiatives, creating a more cohesive regulatory environment. The final rule will likely shape acquisition policy for years, influencing how defense contractors allocate resources for cost accounting and how the government monitors fiscal responsibility across its massive procurement portfolio.