The Cost Accounting Standards (CAS) Board has issued a final rule clarifying an important question that has vexed agencies and contractors for years: for indefinite delivery contracts (IDCs), should CAS coverage be determined at the contract level or the task order level? The CAS Board's answer splits the difference: CAS coverage will be determined at the contract level for single-award IDCs and at the task order level for multiple-award IDCs. The rule also implements changes in monetary thresholds for CAS coverage under Section 1806 National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2026. Read on for answers to questions about this development.
Remind me again—what are the CAS?
The CAS are a set of rules (codified at 48 C.F.R. Chapter 99) which, when they apply, govern contractors' and subcontractors' estimation, accumulation, reporting, allocation, and accounting of their costs. Together with related provisions and clauses in the Federal Acquisition Regulation (FAR), the CAS generally require following disclosed accounting practices, adjusting contract/subcontract pricing to account for changes in such practices, and compliance with certain mandatory accounting requirements (e.g., similar treatment for costs incurred for the same purpose, in like circumstances).
Before this rule, when have the CAS applied?
The regulations at 48 C.F.R. Part 9903 address CAS coverage. The general rule has been that negotiated contracts are subject to some form of CAS requirements (e.g., "full coverage" or "modified coverage") unless an exemption applies. Common exemptions include agreements with small businesses, agreements for the acquisition of commercial items, and "[f]irm-fixed-price contracts or subcontracts awarded on the basis of adequate price competition without submission of certified cost or pricing data" under the Truth in Negotiations Act (TINA, now called the "Truthful Cost or Pricing Data Act").
Two other important CAS exemptions have involved specific monetary thresholds. For example, negotiated contracts not in excess of the TINA threshold (which was increased last October to $2.5 million for prime contracts awarded on or after July 1, 2018) have also been exempt. In addition, there has been an exemption for "[c]ontracts or subcontracts of less than $7.5 million, provided that, at the time of award, the business unit of the contractor or subcontractor is not currently performing any CAS-covered contracts or subcontracts valued at $7.5 million or greater," or what have become known as "trigger contracts."
What has been the confusion with determining CAS coverage for IDCs and task orders?
IDCs have long raised questions regarding how to apply the monetary thresholds governing CAS coverage. The problems include that the value of an IDC is often not known until task orders are ultimately issued off the IDC, and that the task orders themselves can be viewed as binding contracts potentially subject to the CAS. As a blue-ribbon acquisition reform panel (the "Section 809 Panel") noted in 2018, "the question regarding IDCs is how to consider their value for purposes of applying CAS monetary thresholds when the contract price on the face of the contract has no meaning." While the panel recommended applying CAS coverage at the task order level, it noted that agencies frequently applied it at the IDC level and that that approach was arguably more consistent with the CAS Board's regulations:
As the sampled IDCs reveal, the CAS clause was included in the IDC based on the prospect (however unlikely) of obtaining certified cost or pricing data at order placement. The government was, in effect, postponing CAS coverage decisions until the time of order placement. The CASB regulations do not accommodate this condition because CAS determinations on contracts are made at the time of contract award.
In June 2024, the CAS Board requested public input on whether to apply CAS coverage at the IDC or task order level (among other options). The document underlying this request referenced the Section 809 Panel's findings, but did not endorse them or state what the CAS Board's regulations actually required.
How does the CAS Board's new rule resolve the IDC-vs.-task order CAS coverage issue?
In March 2026, the CAS Board proposed to determine CAS coverage at the task order level for multiple-award IDCs, but at the IDC level in a single-award context. The CAS Board noted that the Section 809 Panel had "appeared to focus exclusively on multiple award IDCs," and while it agreed with the Panel's recommendation for such contracts, the Board nevertheless believed that "the ceiling value is a more appropriate indicator of CAS applicability for single award IDCs than order value because it bears a significant relationship to the value of orders actually placed under the IDC." The CAS Board "also concluded that, unlike multiple award IDCs, the information required to determine CAS exemptions and consistently apply CAS to single award IDCs [is] available at the time of award of the IDC."
In its September 1, 2026 final rule, the CAS Board has proposed to finalize its proposal with clarification, despite receiving some comments in opposition from the public. Thus, "[f]or multiple-award IDCs CAS would apply only to those individual task or delivery orders whose values meet the monetary threshold for CAS coverage and do not qualify for another CAS exemption," whereas "application of CAS applicability to single-award IDCs is determined at the time of award of the IDC using the ceiling value to assess if the monetary threshold has been met." The final rule also clarifies "that a single-award IDC can be exempt if the entire IDC meets one of the other exemptions in 9903.202-1(b)[.]"
While commenters expressed concern about treating multiple-award and single-award IDCs differently, the CAS Board concluded such IDCs "are inherently different," in part because "[s]ingle-award IDCs increase the potential for vendor lock-in, further reducing competition and creating risk to the Government." The Board noted that other revisions in the final rule (permitting CAS coverage to be determined based on portions of a contract) addressed worries that otherwise exempt contract types (e.g., commercial items) would be covered simply because they were issued as task orders off a single-award IDC. The Board was also unpersuaded by arguments that CAS coverage may be required based on an anticipated IDC value which is never ultimately achieved due to lower-than-expected orders. In the Board's view, this is "similar to the risk under definitive contracts that may, in some cases, not have all options exercised," and in any event, "this risk decreases at higher values and is mitigated as a result of the increased thresholds finalized in this rule."
Is the final rule changing the CAS monetary thresholds too?
Yes, the CAS Board's final rule is also adjusting the CAS coverage monetary thresholds in various ways. One of the most important is increasing the thresholds for basic CAS coverage from $2.5 million to $35 million (decoupling coverage from TINA) and increasing the threshold for full CAS coverage from $50 million to $100 million. This implements a key reform from the FY26 NDAA. Another important change is the elimination of the $7.5 million "trigger contract" concept, which the CAS Board concluded is no longer "necessary with a higher applicability threshold."
What is the takeaway from these changes for contractors?
The final rule reflects a desire by the CAS Board to increase opportunities for involvement in federal contracting by businesses not traditionally engaged in the federal marketplace, and to otherwise lower the administrative costs associated with contracting. For the IDC/task order portion of the rule, the Board stated it "codifies needed clarity on applying the CAS thresholds and exemptions to IDCs" and that "[h]aving a clear rule avoids unnecessary ambiguity, friction and contract disputes." For the monetary thresholds, the CAS Board's stated goal is to simplify determination of CAS applicability, lower barriers to entry into federal contracting, and increase competition.
Contractors—and businesses considering entering the federal marketplace—should nevertheless keep in mind that significant compliance requirements and considerations will continue to apply. The CAS Board noted the heightened cost risk of single-award IDCs and that "determining CAS applicability for single-award IDCs at the IDC level ensures CAS is not underapplied to higher-risk transactions." Similarly, although increasing the threshold for full CAS coverage is estimated to reduce the number of covered entities from 773 to 564, the reduction in covered contract value is only from $1.22 trillion to $1.21 trillion.