On Tuesday, June 18, the Office of Federal Procurement Policy issued a notice to request public comment on whether and how to amend the Cost Accounting Standards Board’s rules that govern the application of Cost Accounting Standards (CAS) to indefinite delivery vehicles (IDVs). Public comments are due on August 19, 2024, and can be submitted to OMBCASB@omb.eop.gov, referencing Case 2021-01. The board explains its rationale and approach in a summary published with the notice requesting public comment.

The CAS Board has the exclusive authority to make, promulgate, and amend standards and interpretations designed to achieve uniformity and consistency in cost accounting practices that govern the measurement, assignment, and allocation of costs to contracts with the federal government. Codified at 48 CFR, Chapter 99,  the standards apply to agencies, contractors, and subcontractors for estimating, accumulating, and reporting costs in connection with pricing and administration of, and settlement of disputes concerning, certain negotiated prime contract and subcontract procurements with the federal government. Contracts valued at less than $2,000,000 million may be exempt from CAS, so long as the contractor or subcontractor is not currently performing any CAS contracts valued at $7.5 million or greater. CAS coverage is triggered once a contractor receives a CAS-covered award valued at $7.5 million or greater, and future contracts that might have otherwise been exempted will become automatically subject to CAS.

The board is considering when and how to apply CAS to IDVs. These refer to contracts where work is awarded through the placement of individual task and delivery orders as requirements arise, with a minimum guaranteed order value and a ceiling amount that reflect the maximum total value of orders that can be placed under the contract. IDVs may be awarded to either a single contractor or multiple contractors.

The CAS Board has determined that a lack of guidance over whether and how the CAS apply to IDVs has resulted in inconsistent approaches. The board is considering how to provide greater clarity, such as by identifying six potential approaches for addressing CAS coverage to IDVs:

1. 1. Order-by-order. Each task order and delivery order would be treated as an individual contract and CAS would apply only to those orders whose values meet the coverage thresholds. (This is the approach described above that was recommended by the Section 809 Panel.)
   2. Maximum award value. CAS would apply to all orders under an IDV, no matter the value of the order, if the ceiling amount of the IDV meets the coverage thresholds.
   3. Minimum award value. CAS would not apply to any orders under an IDV unless its minimum guarantee amount met the CAS coverage thresholds, in which case CAS would apply to all orders.
   4. Cumulative threshold. CAS would apply at the point where the cumulative value of the orders awarded crosses the dollar threshold for CAS coverage. At that point, the current order and all subsequent orders awarded would be covered by CAS.
   5. Order-by-order for multiple-award IDVs and maximum award value for single-award IDVs. For multiple-award IDVs, each order would be regarded as if it were an individual contract for CAS coverage (see alternative no. 1). For single-award IDVs, coverage would be based on the maximum award value (see alternative 2).
   6. Order-by-order for multiple-award IDVs and cumulative threshold for single-award IDVs. For multiple-award IDVs, each order would be regarded as if it were an individual contract for CAS coverage (see alternative no. 1). For single-award IDVs, CAS would apply at the point where the cumulative value of the orders crosses the dollar threshold for CAS coverage. At that point, the current order and all subsequent orders awarded would be covered by CAS (see alternative no. 4).

The CAS Board is seeking public comments “on the benefits and drawbacks of amending its rules to address IDVs,” as well as additional evaluation considerations or alternatives it should consider.

This is an opportunity for federal contractors with IDVs to offer input to the Office of Procurement Policy prior to its drafting of any new regulations. Therefore, federal contractors with IDVs should consider how application of the CAS Standards to IDVs would affect them and whether there might be issues or alternatives they would like the agency to consider.