This guide explains FAR Part 30 of the Federal Acquisition Regulation (FAR), with practical examples for federal contractors.
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FAR Part 30: Cost Accounting Standards
Your company just won another government award, and your finance lead wants to change how overhead is allocated. Before anyone touches the spreadsheet, one question matters: does this work trigger Cost Accounting Standards? FAR Part 30 addresses Cost Accounting Standards Administration. Start with FAR 30.000, which says FAR Part 30 does not apply to sealed bids, or to contracts with small business concerns.
So a qualifying small business is not in a gray zone for CAS coverage. And being outside CAS does not mean costs are reimbursed automatically. Those are separate questions. Two bodies of rules work together here: the Cost Accounting Standards Board writes the standards, while the FAR administers them. In plain terms, it covers how coverage is determined, how disclosure statements are handled, and how changes in accounting practice are reviewed.
The standards themselves are written by the Cost Accounting Standards Board, and they live in Title 48 of the Code of Federal Regulations, chapter 99. FAR Part 30 points you there and sets up the administration. Two pointers help. FAR 30.201-1 sends you to 48 CFR 9903.201-1 for other exemptions. FAR 30.201-2 sends you to 9903.201-2, which describes the types of coverage, full or modified.
Check coverage before assuming CAS applies
Read the current text of those sections for the types and conditions, rather than relying on a number someone remembers. And check which version your solicitation uses, since an agency's adoption, or a deviation during the FAR overhaul, may differ from the codified text. Keep four ideas separate. GAAP guides your financial statements. Cost Accounting Standards require consistent measurement, assignment, and allocation of costs on covered contracts.
FAR Part 31's applicable cost principles address allowability, which is distinct from allocation and payment terms. And an adequate accounting system is a different question again: can your systems reliably track and support costs? Meeting one does not answer the others. Full and modified coverage also do not automatically mean every standard applies to every contractor. Read 9903.201-2 and your contract clauses to see what each type involves.
A disclosure statement describes your cost accounting practices. It is not a certification, and it is not an approval of those practices. And not every contractor must file one, so check the regulation and your contract rather than assume. Once coverage applies, the Cognizant Federal Agency Official, or CFAO, administers CAS for your company. FAR Subpart 30.6 covers that administration, including cost impacts and noncompliances. It also distinguishes kinds of accounting changes: required changes, where the rules force an adjustment, versus unilateral or desirable changes.
Separate CAS, GAAP, allowability, and system adequacy
The category matters for how the cost impact is treated. Under 30.603-1, required changes can arise from new or modified standards, with notice through the applicable clauses. Under 30.603-2, for unilateral changes the Government does not pay aggregate increased costs. The CFAO determines whether a change is desirable and not detrimental. Don't treat a controller's decision as desirable. Here is a hypothetical with two businesses.
Northline Systems is a fifteen-person IT firm that wins its first cost-reimbursement contract. If it qualifies as a small business concern for that contract, CAS does not apply under the FAR Part 30 scope rule, so the founder is right on that point. But the controller still has other accounting duties: the cost principles in FAR Part 31, sound records, and accurate billing. Exempt from CAS is not exempt from accounting.
Now take Harbor Federal Services, a separate, larger contractor that is not small and already holds a covered contract. Its finance team wants to replace one company-wide indirect allocation with separate pools. That is a change in cost accounting practice, so it needs the FAR Part 30 process: work with the CFAO and expect a cost impact review before the change is treated as settled.
Administer accounting-practice changes correctly
Same idea, very different consequences. Common mistakes. Treating coverage as a company-wide label, when it attaches to contracts and subcontracts and can change as your portfolio grows. Changing the accounting first and asking compliance questions later. Assuming a CAS exemption means costs are reimbursed automatically. And assuming a flowdown clause overrides a regulatory exemption. If a subcontract seems to conflict with an exemption, ask your contracting counterpart and document the answer.
Now a practical team exercise. This is a GovSuccess practice, not a new FAR requirement. Put every active award and pending proposal on one worksheet. For each, record the contract type, the clauses present, the exemption you believe applies, and the source you checked. Have a second person review it. Add one more column: if we change our allocation method next quarter, what must we confirm first?
Repeat whenever a new award arrives. Your next move: run this coverage screen before your next accounting change. For worksheets and plain-language guides, visit govsuccess.com. This guide is general education, not legal advice. It does not certify compliance or guarantee any award. Consult qualified counsel or your contracting officials for your situation.
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