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award, within which disclosure must counting practices clause has a responbe made.

sibility to maintain an accurate disclo(f) Determination by agency head sure statements(s) and comply with that it is impractical to secure disclo- those disclosed practices if: (1) He was sure statement(s). If the head of the awarded a negotiated national defense agency (see § 1-1.204) or his designee; contract in his current cost accounting the cognizant Assistant Secretary for a period of $10 million or more, or (2) he Military Department; or the Director is, or is a part of, a company which, toof the Defense Logistics Agency, the gether with its subsidiaries, received Defense Communications Agency, the net awards of negotiated national deDefense Nuclear Agency, or the De- fense prime contracts and subconfense Mapping Agency determines tracts subject to cost accounting that it is impractical to secure the dis standards totaling more than $10 milclosure statement(s) in accordance lion in his most recent completed cost with the clause(s) in § 1-3.1204-1 and accounting period. Should his obligathis Subpart 1-3.12 or ASPR 7- tion to maintain the disclosure sta 104.83(a) and ASPR Part 12 of section ment cease because he no longer meets III, he may authorize award of such or exceeds the financial thresholds, he contract without obtaining such will be required to follow consistently statement(s). This authority shall not the disclosed practices for those conbe delegated. He shall, within 30 days

tracts awarded during a period in thereafter, submit a report to the Cost which he was obligated to submit a Accounting Standards Board, setting

disclosure statement(s). A change to forth all material facts.

such practices may be proposed by (g) Privileged and confidential infor either the contractor or the Govern

ation in disclosure statementis). If ment and negotiated by the contractor the offeror or contractor notified the

and his CAS cognizant contracting ofcontracting officer that the disclosure ficer. statement contains trade secrets and (43 FR 14111, Apr. 4, 1978] commercial or financial information which is privileged and confidential, 1-3.1203-2 Applicability of cost account. the disclosure statement will be pro ing standards. tected and will not be released outside (a) Small business concerns. All conthe Government (see paragraph (a)(1)

tracts and subcontracts with small of the cost accounting standards business concerns are wholly exempt clause or paragraph (a)(2) of the dis- from cost accounting standards. closure and consistency of cost ac (b) National defense contracts with counting practices clause).

other than small business concerns. (1) (h) Amendment of disclosure state. The applicability of cost accounting ments. Amendments of a disclosure standards to a negotiated national destatement after contract award shall fense contract is implemented by inbe processed in accordance with 4 CFR corporation of a clause in the contract 351.120 and $$ 1-3.1205(d) and 1- as required by CASB rules, 4 CFR 3.1207. Normally the cognizant con- Part 331 or 332. These national de. tracting officer should require resub- fense CAS awards consist of the first mission of a complete, updated disclo negotiated national defense contract sure statement pursuant to 4 CFR or subcontract of more than $500,000 351.120 only when the number of received by a contractor business unit amended pages or the nature of the and subsequent negotiated national amendments are so extensive that the defense prime contracts and subconreview process would be substantially tracts of more than $100,000 received expedited as a result of the resubmis by that business unit. Whenever a sion.

business unit completes all contracts (i) Responsibility to maintain accu- subject to a CAS clause required by racy of disclosure statement(s). The CASB regulations, its obligation to contractor or subcontractor who has contracts containing either the cost

'For a document relating to this section, accounting standards clause or the dis- see Appendix-Temporary Regulations, ap. closure and consistency of cost ac- pearing at the end of Chapter 1.

follow CAS requirements ends and is not reinstated until it again receives in award in excess of $500,000. Award and sales data of the preceding cost accounting period are used to determine type of contract coverage for the current period. There are two types of CAS coverage: Full coverage under 4 CFR Part 331 and modified coverage mder 4 CFR Part 332.

(2) Full coverage applies to contracfor business units which: (i) Receive a national defense CAS award of $10 million or more, (ii) received national defense CAS awards during the prereding cost accounting period of $10 million or more, or (iii) received national defense CAS awards during the preceding cost accounting period of less than $10 million but such CAS awards accounted for 10 percent or more of the business unit's sales for the preceding period. These dollar thresholds apply to contractor business units, irrespective of companywide award dollar totals.

(3) Modified coverage applies to contractor business units which received national defense CAS awards during the preceding period of less than $10 million and such CAS awards accounted for less than 10 percent of the business unit's sales of the preceding period. Modified coverage requires the contractor to comply only with requirements of standard 401, consistency in estimating, accumulating, and reporting costs (4 CFR Part 401) and standard 402, consistency in allocating costs incurred for the same purpose (4 CFR Part 402).

(4) CAS coverage is extended to national defense subcontract awards under CAS covered contracts under the same provisions; thus, a subcontractor could be required to comply with full coverage even though the prime contractor is required to comply only with modified coverage.

(5) Certain exemptions and waivers to applicability of CAS standards, rules, and regulations apply to national defense contracts. Cost accounting standards are applicable to negotiated national defense contracts exceeding $100,000 except when:

(i) The price is: (A) Based on established catalog or market prices of commercial items sold in substantial quan

tities to the general public, or (B) set by law or regulation;

(ii) The contract is awarded to a small business concern;

(iii) The contract is to be executed and performed in its entirety outside the United States, its territories and possessions; or

(iv) The CASB has otherwise approved a waiver or exemption.

NOTE 1.-Under certain circumstances as prescribed in 4 CFR 331.30(b)(8), the CASB has provided an exemption for national defense contracts and subcontracts of $500,000 or less (see also paragraph (b)(1) of this $ 13.1203-2). This exemption is also applicable to nondefense contract and subcontract awards.

NOTE 2.-Two blanket exemptions are applicable to national defense subcontracts under CAS covered contracts: (a) When the subcontract is awarded to a small business concern, and (b) when the subcontract is awarded on a firm, fixed-price basis after the contractor or subcontractor making the award received offers from at least two firms not associated with each other or such contractor or subcontractor, providing: (1) The solicitation to all competing firms is identical, (2) price is the only consideration in selecting the subcontractor from among the competing firms solicited, and (3) the lowest offer received in compliance with the solicitation from among those solicited is accepted. These blanket exemptions are also applicable to nondefense subcontract awards.

(c) Nondefense contracts with other than small business concerns. (1) The applicability of cost accounting standards to a negotiated nondefense contract is implemented by a clause in the contract (substantially similar to the CASB clauses) as required by this Subpart 1-3.12. These nondefense CAS awards consist of the first negotiated nondefense contract or subcontract over $500,000 received by a contractor business unit in the event the business unit is not performing a CAS covered contract or subcontract. Otherwise, cost accounting standards are applicable to negotiated nondefense contracts and subcontracts over $100,000 received by that business unit. W henever a contractor business unit completes the performance of all CAS COVered contracts, the obligation to follow cost accounting standards ends and is not reinstated until it again receives an award in excess of $500,000. Nation

al defense CAS covered award and paragraphs (a) and (b)(5) of this $1sales data of the preceding cost ac- 3.1203-2, the following nondefense counting period (normally, the con procurements are exempt: tractor's fiscal year) for the business (i) Contracts with educational instiunit receiving the award are used to tutions subject to Subpart 1-15.3; determine the type of contract cover (ii) Contracts with State and local age for the current period. Nondefense Governments subject to Subpart 1CAS covered award data is not used. There are two types of nondefense (iii) Contracts with hospitals; CAS coverage; namely full coverage

(iv) Firm fixed-price contracts to be and modified coverage.

awarded after receiving offers from at (2) Full coverage applies to negotiat least two firms not associated with ed nondefense contracts and subcon- each other, providing that: (A) The sotracts of over $100,000 awarded to con licitation to all competing firms is tractor business units which: (i) Are identical, (B) price is the only considperforming a national defense CAS

eration in selecting the contractor covered award of $10 million or more,

from among the competing firms solic(ii) received national defense CAS Cov

ited, (C) the lowest offer received in ered awards during the preceding cost

compliance with the solicitation from accounting period of $10 million or

among those solicited is accepted, and more, or (iii) received national defense

(D) the profit center, division, or simiCAS covered wards during the preced

lar organizational unit of a company ing cost accounting period of under

to which the contract is to be awarded $10 million but such CAS awards ac

is not on the date of such award percounted for 10 percent or more of the

forming under a CAS covered national business unit's sales for the preceding

defense contractor subcontract. period. These national defense dollar

Under (D), performance of a contract thresholds apply to contractor busi

or subcontract extends from the date ness units, irrespective of company.

of award of a contract or subcontract wide national defense award dollar

to the date when the work required by totals (see § 1-3.1203-2(c)(4) for ex

the contract or subcontract is completemptions).

ed; and (3) Modified coverage applies to the

(v) Contracts where a waiver under first negotiated nondefense contract

$ 1-3.1211 has been approved or to the or subcontract over $500,000 received

extent a modification or withdrawal

under $ 1-3.1218 is applicable. by a contractor business unit in the event the business unit is not perform NOTE.-FPR temporary regulations 40 and ing a CAS covered contract or subcon- 43 are currently applicable in this regard. tract. Otherwise, cost accounting (43 FR 14111, Apr. 4, 1978) standards are applicable to negotiated nondefense contracts and subcontracts $ 1-3.1203-3 Solicitation notices.' over $100,000 received by that business (a) National defense contracts. (1) unit, unless full coverage in accord- The notice entitled disclosure stateance with paragraph (2) of this § 1- ment-cost accounting practices and 3.1203-2(c) applies (see $ 1-3.1203 certification in this § 1-3.1203-3(a)(1) 2(c)(4) for exemptions).

shall be inserted in all national de(4) The exemptions and waivers fense solicitations which are likely to which apply to national defense con- result in the award of a negotiated tracts and subcontracts with large contract exceeding $100,000 on and business concerns also apply to nonde- after March 10, 1978, except when the fense contracts and subcontracts. price is: (i) Based on established cataThese provisions are contained in log or market prices of commercial paragraph (b)(5) of this § 1-3.1203-2. items sold in substantial quantities to Deviations in subcontract flowdown the general public, or (ii) set by law or requirements granted pursuant to regulation. The notice shall not be inASPR 3-1204.2(b) or $ 1-3.1204-3(b) are also applicable to subcontracts

For a document relating to this section, under nondefense contracts. In addi- see Appendix-Temporary Regulations, ap. tion to the exemptions and waivers in pearing at the end of Chapter 1.

serted if the solicitation is limited to small business concerns. The notice should also be excluded from solicita

solicita. tions sent to the Canadian Commercial Corp. or from solicitations which will result in contracts executed and performed in their entirety outside the United States, its territories and possessions.

OI. Certificate of concurrent submission of disclosure statement(s). The offeror hereby certifies that he has submitted, as a part of his proposal under this solicitation. copies of the disclosure statement(s) as follows: (i) Original and one copy to the cognizant contracting officer (Administrative Contracting Officer (ACO), see DOD Directory of Contract Administration Components (DOD 4105.59H)); and (ii) one copy to the cognizant contract auditor.

Date of disclosure statement(s);

DISCLOSURE STATEMENT-Cost ACCOUNTING

PRACTICES AND CERTIFICATION Any contract in excess of $100,000 resulting from this solicitation except: (i) When the price negotiated is based on: (A) Established catalog or market prices of commer cial items sold in substantial quantities to the general public, or (B) prices set by law or regulation: (ii) contracts awarded to small business concerns (as defined in 1701.1 of the Armed Services procurement regulations or FPR $ 1-1.701-1); or (iii) contracts which are otherwise exempt (see 4 CFR 331.30(b)) shall be subject to the requirements of the Cost Accounting Standards Board. Any offeror submitting a proposal, which, if accepted, will result in a contract subject to the requirements of the Cost Accounting Standards Board must, as a condition of contracting, submit a disclosure statement as required by regulations of the Board. The disclosure statement must be submitted as a part of the offeror's proposal under this solicitation (see (1), below) unless: (i) The offeror, together with all divisions, subsidiaries, and affiliates under common control, did not receive net awards exceeding the monetary exemption for disclosure as established by the Cost Accounting Standards Board (see (II), below); (ii) the offeror exceeded the monetary exemption in his cost accounting period immediately preceding the cost accounting period in which this proposal was submitted but, in accordance with the regulations of the Cost Accounting Standards Board, is not yet required to submit a disclosure statement (see (III), below); (iii) the offeror has already submitted a disclosure statement disclosing the practices used in connection with the pricing of this proposal (see (IV), below); or (iv) post-award submission has been authorized by the Contracting Officer. See 4 CFR 351.70 for submission of copy of disclosure statement to the Cost Accounting Standards Board.

CAUTION.-A practice disclosed in a disclosure statement shall not, by virtue of such disclosure, be deemed to be a proper, approved, or agreed to practice for pricing proposals or accumulating and reporting contract performance cost data.

Check the appropriate box below.

Name(s) and address(es) of cognizant ACO(s) where filed:

The offeror further certifies that practices used in estimating costs in pricing this proposal are consistent with the cost accounting practices disclosed in the disclosure statement(s).

O II. Certificate of monetary exemption. The offeror hereby certified that he, together with all divisions, subsidiaries, and affiliates under common control, did not receive net awards of negotiated national defense prime contracts and subcontracts subject to cost accounting standards totaling more than $10 million in his cost accounting period immediately preceding the period in which this proposal was submitted. The offeror further certifies that if his status changes prior to an award resulting from this proposal he will advise the contracting officer immediately.

CAUTION.-Offerors who submitted a Disclosure Statement under the filing requirements previously established by the Cost Accounting Standards Board may claim this exemption only if the dollar volume of CAS covered national defense prime contract and subcontract awards in their preceding cost accounting period did not exceed the $10 million threshold and the amount of this award will be less than $10 million. Such of. ferors will continue to be responsible for maintaining the disclosure statement and following the disclosed practices on CAS covered prime contracts and subcontracts awarded during the period in which a disclosure statement was required.

O III. Certificate of interim exemption. The offeror hereby certifies that: (i) He first exceeded the monetary exemption for disclosure, as defined in (II) above, in his cost accounting period immediately preceding the cost accounting period in which this proposal was submitted, and (ii) in accordance with the regulations of the Cost Accounting Standards Board (4 CFR 351.40(f)), he is not yet required to submit a disclosure statement. The offeror further certifies that if an award resulting from this proposal has not been made within 90 days after the end of that period, he will immediately submit a revised certificate to the contracting officer, in the form specified under (I), above or (IV), below, as appropriate, to verify his submission of a completed disclosure statement.

CAUTION.-Offerors may not claim this exemption if they are currently required to disclose because they were awarded a CAS covered national defense prime contract or subcontract of $10 million or more in the current cost accounting period. Further, the exemption applies only in connection with proposals submitted prior to expiration of the 90 day period following the cost accounting period in which the monetary exemption was exceeded.

IV. Certificate of previously submitted disclosure statement(s). The offeror hereby certifies that the disclosure statement(s) were filed as follows:

Date of disclosure statements(s):

$500,000 or less awarded after January 1, 1975, which contain the Cost Accounting Standards clause. The offeror further certifies he will immediately notify the Contracting Officer in writing in the event he is awarded any other contract or subcontract containing the Cost Accounting Standards clause subsequent to the date of this certificate but prior to the date of any award resulting from this proposal.

(3) The Cost Accounting Standards Board has provided for the use of modified contract coverage under provisions of 4 CFR 332 when the offeror is eligible and so elects. In order to effectively administer those provisions, the solicitation notice in $ 1-3.12033(a)(3) shall be inserted in all solicitations requiring the inclusion of the solicitation notice in § 1-3.1203-3(a)(1).

Names(s) and address(es) of cognizant contracting officer(s) (ACO(S)) where filed:

The offeror further certifies that practices used in estimating costs in pricing this proposal are consistent with the cost accounting practices disclosed in the disclo. sure statement(s).

(2) The Cost Accounting Standards Board has provided for the exemption of national defense contracts of $500,000 or less under certain circumstances. 4 CFR 331.30(b)(8) prescribes the circumstances under which such an exemption is applicable. In order to effectively administer the require ments of that paragraph, the solicitation notice in this $ 1-3.1203-3(a)(2) shall be inserted in all solicitations requiring the inclusion of the solicitation notice in § 1-3.1203-3(a)(1).

COST ACCOUNTING STANDARDS ELIGIBILITY

FOR MODIFIED CONTRACT COVERAGE If the offeror is eligible to use the modified provisions of 4 CFR Part 332, and elects to do so, he shall indicate by checking the box below. Checking the box below shall mean that the resultant contract is subject to this Disclosure and Consistency of Cost Accounting Practices clause in lieu of the Cost Accounting Standards clause.

The offeror hereby claims an exemption from the Cost Accounting Standards clause under the provisions of 4 CFR 331.30(b)(2), and certifies that he is eligible for use of the Disclosure and Consistency of Cost Accounting Practices clause because (i) during his cost accounting period immediately preceding the period in which this proposal was submitted, he received less than $10 million in awards of CAS covered national defense prime contracts and subcontracts, and (ii) the sum of such awards equaled less than 10 percent of his total sales during that cost accounting period. The offeror further certifies that if his status changes prior to an award resulting from this proposal, he advise the contracting officer immediately.

CAUTION.-Offerors may not claim the above eligibility for modified contract coverage if this proposal is expected to result in the award of a contract of $10 million or more or if, during their current cost accounting period, they have been awarded a single CAS-covered national defense prime contract or subcontract of $10 million or more.

(4) In order to effectively administer equitable adjustments for new standards, the solicitation notice in this $ 13.1203-3(a)(4) shall be inserted in all solicitations requiring the inclusion of

If this

COST ACCOUNTING STANDARDS-EXEMPTIONS

FOR CONTRACTS OF $500,000 OR LESS

this proposal is expected to result in the award of a contract of $500,000 or less, the offeror shall indicate whether the exemption to the cost accounting standards clause under the provisions of 4 CFR 331.30(b)(8) is claimed. Failure to check the box below shall mean that the resultant contract is subject to the cost accounting standards clause or that the offeror elects to comply with such clause.

The offeror hereby claims an exemption from the Cost Accounting Standards clause under the provisions of 4 CFR 331.30(b)(8) and certifies that he has received notification of final acceptance of all deliverable items on (i) all prime contracts or subcontracts in excess of $500,000 which contain the Cost Accounting Standards clause, and (ii) all prime contracts or subcontracts of

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