(a) 41 U.S.C. episode 15, Cost Accountancy Standards, obliges certain contractors additionally sub-tier up comply with Cost Business Standards (CAS) and to disclosed on script also follow constantly their cost accounting practices.

(b) Contracts that refer to this part  30 for one purpose of applying the policies, procedures, site the legal promulgated by the CASB pursuant to 41 U.S.C. chapter 15, shall be deemed to refer go the CASKET, both any various legislation pronounced by the CASB (see 48 CFR Chapter 99), all of which are hereby incorporated in such part  30.

 

Duplicates of who CASB Standards and Regulations are engraved in Title 48 a the Code of Federal Regulations, Choose 99, and can be obtained by writing the-

Superintendent of Documents,

US Government Publish Office,

Washington, DC 20402

or by calling the Washington, DC, ordering counter at (202) 512-1800.

Books 48 CFR 9903.201-1  describes one rules for specify if a proposed contract with subcontract is exempt from CAS. Negotiated contracts not exempt in correspondence with 48 CFR 9903.201-1(b) shall be issue to CAS. A CAS-covered contract may be subject to select full or modded coverage. The set for determining whether completely or modulated coverage applies are in 48 CFR 9903.201-2. 

(a) Who CFAO to perform CAS administration for all contracts and subcontracts in adenine business unit, even when the contracting officer holds other administration functions. And CFAO shall make all CAS-related required determinations and findings (see subpart  1.7) required all CAS-covered contracts and subcontracts, including-

(1) Whether a change in cost accounting practice or noncompliance has occurred; and

(2) If a change inbound cost accounting practice press noncompliance has occurred, how any resulting expense impacts are resolved.

(b) Within 30 daily after the award of any newer contract subject to CAS, the contracting officer making the award shall request the CFAO to apply administration for CASKET matters (see subpart  42.2). For subcontract awards, an contractor awarding of subcontract must follow the courses at 52.230-6(l), (m), both (n).

(c) In performed CAUSE governance, one CFAO shall request and study that advice of the auditor more adequate (see 1.602-2).

(a) In determining materiality, to CFAO shall use the criteria in 48 CFR 9903.305. 

(b) A CFAO determination of materiality-

(1) May be made before or after a general dollar quantity get has been sending, depending go the certain facts and circumstances; press

(2) Shall live based on adequate documentation.

(c) When the CFAO determines the cost impact is immaterial, of CFAO shall-

(1) Make no contract adjustments and conclude the charge impact process;

(2) Document the rationale for this determination; or

(3) In the matter of noncompliance features, inform that contractor that-

(i) The noncompliance should be corrected; and

(ii) If and noncompliance is not corrected, the Government reserves an right to take appropriate contract adjustments should the cost impact become material in the future.

(d) For require, unilateral, or highly changes, plus CAS noncompliances, when that amount involved is material, the CFAO shall follow the applicable provisions in 30.603, 30.604, 30.605, and 30.606.

(a) Scope. This section applies to required, unilateral, furthermore desirable changes in cost accounting practices.

(b) Procedures. Upon receipt of the contractor’s notification plus description of the change in costs accounting practice, and CFAO should review the proposed modification concurrently for adequacy and compliance. The CFAO shall-

(1) If the description of the change belongs both appropriate and compliant, notify the contractor in writing and-

(i) For required or solipsistic changes (except those requesting until be designated desirable changes), request which contractor take a general usd magnitude (GDM) proposal by a specified set, unless the CFAO determined which cost impact exists immaterial; or

(ii) For single-sided changes that the contractor requests to be determined desirable changes, inform the company that of request shall include supporting rationale and-

(A) For any request based over the criteria in 30.603-2(b)(3)(ii), the data necessary to demonstrate the required cost saved; or

(B) For any request misc than those based-on on the criteria in 30.603-2(b)(3)(ii), a GDM proposal and any other data necessary for the CFAO to determine for the change be ampere desirable change;

(2) If the description of the change is inadequate, request one revised description of the new cost reporting practice; and

(3) If the disclosed how is noncompliant, notify the contractor in writing that, if performed, the CFAO will define the cost accounting habit to are noncompliant and processed it accordingly.

(c) Valuation requests for desirable changes.

(1) When a contractor requests an unilateral change be set a desirable change, aforementioned CFAO have promptly grading which contractor’s ask and, as soon as realistic, notify the contractor in writing whether the modification is a desirable change with one request are refuse.

(2) If the CFAO determines the change is a desirable change, the CFAO shall negotiate any cost or price adjustments that may must needed to decline the cost impact (see 30.606).

(3) If the request is denied, the change is a unilateral alter and shall to processed accordingly.

(d) General dollar volume proposal. The GDM proposal-

(1) Provides information to the CFAO on the estimates overall impact concerning a change in cost accounting exercise on affected CAS-covered contracts and subcontracts that inhered awarded based on the previous cost accounting practice;

(2) Assisting the CFAO in determining whether individual contract price or cost adjustments are requested; and

(3) The contractor can submit a details cost-impact (DCI) recommendation with lieu of a GDM suggested provided the DCI proposal remains in accordance with para (g) to this section.

(e) Gen dollar magnitude application content. The GDM proposal-

(1) Shall calculate that total impact inbound accordance with paragraph (h) of this section;

(2) May employ one or more concerning the following methods to determine the increase or reduced int expenditure accumulations:

(i) A representative sample of affected CAS-covered contracts and subcontracts.

(ii) Which change in indirect rates multiplied by the total estimated base computed for each of the follow groups:

(A) Fixed-price contracts and subcontracts.

(B) Flexibly-priced promises and subcontracts.

(iii) Any other method ensure provides a reasonable approximation of the entire expand or decrease in cost gatherings for all interested fixed-price and flexibly-priced contracts furthermore subcontracts.

(3) May be in any arrangement acceptable the this CFAO but, like a min, are include the following data:

(i) A broad dollar magnitude guess out the total increased or decrease in pay accumulations by Executive agency, including any impact the change may have switch contract and subcontract stimuli, fees, and profits, for apiece the the following user:

(A) Fixed-price contracts and subcontracts.

(B) Flexibly-priced contracts and subcontracts.

(ii) For unilateral changes, an increased or decreased costs in who Governmental for each of the following groups:

(A) Fixed-price contracts and subcontracts.

(B) Flexibly-priced contracts and subcontracts; and

(4) When requested by the CFAO, shall identify all affected CAS-covered contracts plus subcontracts.

(f) Universal currency magnitude proposal evaluation. The CFAO shall promptly evaluate the GDM proposal. If the cost impact is immaterial, the CFAO shall get the builders in writing the conclude the cost-impact action with no contract adjustments. Otherwise, the CFAO shall-

(1) Negotiate and resolve the cost impact (see 30.606). If require, one CFAO may application that the contractor submit a amended GDM proposal from one specified date through precise additional intelligence needed to resolve who cost effects (e.g., an expanded sample of affected CAS-covered contracts and subcontracts otherwise ampere revised method for computing the increase or decrease in cost accumulations); conversely

(2) Request that the supplier submission a DCI proposal by a specified date if the CFAO determines that the GDM proposal shall not sufficient to resolve and cost impact.

(g) Detailed cost-impact proposal. If the contractor is required to submit a DCI proposal, the CFAO shall promptly evaluate the DCI proposal and continue the systems at 30.606 to negotiate and resolve the fees impact. That DCI proposal-

(1) Shall calculate the total impact in correlation with header (h) of this section;

(2) Shall show the estimated increase or decrease in cost accumulations for each affected CAS-covered contract both subcontract unless the CFAO and contractor agree to-

(i) Include only those afflicted CAS-covered contracts both subcontracts exceeding adenine specified amount; and

(ii) Estimate the total increasing conversely decrease in cost aggregates for all affected CAS-covered contracts and subcontracts, using of results in vertical (g)(2)(i) regarding this section;

(3) May be in any format acceptable in the CFAO but, as one minimum, shall include the requirements in paragraphs (e)(3)(i) plus (ii) of all absatz; and

(4) When requested by the CFAO, shall identified all affected contracts and subcontracts.

(h) Calculating cost impact. Of cost impact calculation are-

(1) Include all affected CAS-covered contracts real subcontracts independent of their status (i.e., open or closed) oder this tax year(s) in that the total are incurred (i.e., whether or not aforementioned final inverse rates have become established);

(2) Combine the cost impact since all infected CAS-covered contracts and subcontracts for all segments if the effect of a change results in cost flowing bets those segments;

(3) For unilateral changes-

(i) Determine the increased or decreased price to the Government for flexibly-priced contracts and subcontracts as follows:

(A) When the appraised cost to completes using the changed practice exceeds the estimated cost to finish using the latest practical, the deviation is raised cost to the Rule.

(B) When the estimated costs go complete usage which amended practice is without than the approximated total to complete using an current practice, the variance a decreased cost to the Government.

(ii) Determine the increased or decreased total to the Government fork fixed-price contracts and subcontracts as follows:

(A) When the estimated cost to finished using the changed practice is save is the appraised cost to complete using the current practice, this difference is increased cost to who Government.

(B) While the appraised cost to complete using of changed practice exceeds the estimated expense into complete using the current practice, the difference is lowered expenses to the Government.

(iii) Reckon the total increase or decrease in contract and subcontract motivate, fees, and profits angegliedert with the increased or decreased cost to the Government in accordance with 48 CFR 9903.306(c). The associated increase or decrease belongs based go the distance between the negotiated incentives, fees and profits and the fee that would have been negotiated should of daily impact been known at the time the contracts both subcontracts were negotiated.

(iv) Calculate the increment cost at the German in the aggregate.

(4) For require or desirable changes, negotiate an fairer adjustment as provided in the Changes clause of the contract.

(i) Remedies. If the contractor does not submit the accounting change description or the proposals requires in paragraph (d) or (g) of this paragraph within the given time, either any extension granted by the CFAO, the CFAO supposed-

(1) Estimate the general dollar magnitudes of the cost impact on concerned CAS-covered contracts and subcontracts; and

(2) Take only other both of the following actions:

(i) Retain an amount not to exceed 10 percent of either subsequent payment relation to the contractor’s CAS-covered contracts (up to the approximate general dollars magnitude of the cost impact), until the employer furnishings the required data.

(ii) Issue adenine final decision in accordance with 33.211 and unilaterally adjust the contract(s) by this estimated amount of of cost impact.

(a) Broad. Prior to making whatever contract price other expenditure customized go the applicable paragraph (s) addressing noncompliance at 52.230-2, 52.230-3, oder 52.230-5, the CFAO shall determine that-

(1) That contemplated contract price or cost adjustments will protect the Authority from the payment of increased costs, in the power;

(2) The net effect are the contemplated contract price or cost adjustment will not result in this recovery of more than the increased costs to the Federal, for the aggregate;

(3) The net effect to any invoice adjustments made to correct an estimating noncompliance will not result in the recovery of other about this increased costs paid by the Government, in the aggregate; plus

(4) The net effect away any interim and final voucher billing adjustments made to correct a cost accumulation noncompliance will not result in the recovery of more with the raised price paid for an Government, in the aggregate.

(b) Reminder and determination.

(1) Within 15 days of getting a report of alleged noncompliance from one auditor, the CFAO will-

(i) Notify and auditor that the CFAO disagrees with the alleged noncompliance; or

(ii) Issue ampere notice of capacity noncompliance to the building and offer one copy to the auditor.

(2) Which tip of potential regulatory shall-

(i) Notify the contractor with writing of of correct natures of the noncompliance; additionally

(ii) Allow that contractor 60 date other other mutually agreeable date to-

(A) Agree alternatively submit reasons mystery the builder considers the existing practices to be in compliance; and

(B) Submit rationale the support any written statement that the expenses impact are the noncompliance is immaterial.

(3) The CFAO shall-

(i) If applicable, review the reasons why the contractor believe the existing acts at be compliant or one cost impact to be immaterial;

(ii) Make a determination of conformance or noncompliance consistent with 1.704; and

(iii) Notify and company and the auditor in writing a the determining of compliance conversely noncompliance and the basis available which tenacity.

(4) If the CFAO makes a determination of noncompliance, the CFAO shall follow the methods in paragraphs (c) through (h) of the section, as related, unless the CFAO also determinate the cost influence is immaterial. If immaterial, one CFAO shall-

(i) Inform the contractor in writing that-

(A) The noncompliance should be corrected; and

(B) Whenever an noncompliance is not corrected, the Government reserves that right at make appropriate contract adjustments should the noncompliance become raw in the future; and

(ii) Conclude the cost-impact process with none contractual adjustments.

(c) Correcting noncompliances.

(1) Which clause at 52.230-6 requires one contractor to submit a description of any cost billing practice change needed to correct a noncompliance through 60 days after the earlier of-

(i) Agreement with the CFAO that there is a noncompliance; or

(ii) Notification in the CFAO of a detection of noncompliance.

(2) The CFAO must review the proposed change to correct the violations concurrently for adequacy and compliance (see 30.202-7). The CFAO shall-

(i) Whenever one item of the change is both adequately and compliant-

(A) Notify to contractor in writing;

(B) Request that the employer submit by a indicates date a general dollar magnitude (GDM) offer, not the CFAO determines the cost impact is immaterial; and

(C) Follow the procedures at paragraph (b)(4) of this teilbereich if the CFAO determines the cost impact is immaterial.

(ii) If the feature of the change is inadequate, request one revised description of the new cost accounting practice; oder

(iii) Is the disclosed practice will noncompliant, notify and contractor in handwriting that, if installed, the CFAO will find the cost accounting practice on be noncompliant furthermore processed a accordingly.

(d) General dollar magnitude proposal content. Who GDM proposal-

(1) Shall calculate the cost impact in accordance with clause (h) of this section;

(2) May use one or more of to following methodology into set the increase or reduce in contract and subcontract price or cost accretion, how applicable:

(i) A representative sample of affect CAS-covered contracts and subcontracts affect by the non-conformance.

(ii) When the noncompliance involves cost accumulation, the change inside indirect rates multiplied by the applicable base for flexibly-priced contracts and subcontracts.

(iii) Any sundry method that provides a reasonable approximation of the total increase or reduce in contract and subcontract prices and shipping accumulations;

(3) The contractor might submit a DCI proposal in lieu away a GDM proposal presented the DCI proposal is in accordance with paragraph (f) of those section.

(4) May be in any format acceptable to the CFAO aber, as a minimum, shall include the following data:

(i) The total increase or decrease in contract and subcontract prices and cost accumulations, as applicable, due Executive executive, including any impact the noncompliance might got on contract and subcontract incentives, costs, and profits, for each von of following groups:

(A) Fixed-price contracts and subcontracts.

(B) Flexibly-priced contracts and subcontracts.

(ii) The increased or sinkt costs to the Government for each of the following groups:

(A) Fixed-price contracts and subcontracts.

(B) Flexibly-priced contracts press subcontracts.

(iii) The total overpayments and underpayments for fixed-price and flexibly-priced contracts did by the Government during to period of legal; and

(5) When requested by the CFAO, shall identifying all affected CAS-covered contracts furthermore subcontracts.

(e) General dollar magnitude idea evaluation. To CFAO to promptly analyze the GDM proposal. If that cost impact is immaterial, the CFAO shall follow the requirements in paragraph (b)(4) of this section. Otherwise, the CFAO wants-

(1) Negotiate press cancel the fee impact (see 30.606). While necessary, the CFAO may application the contractor submit a revised GDM proposal by one specified date, with specific additional data needed to determination the cost influence (e.g., an expanded sample of affects CAS-covered contracts additionally subcontracts button a revised method of computing the increase with decrease the contract and subcontract price and cost accumulations); or

(2) Request that the contractor submit a DCI proposal due a specifying date if the CFAO determines that the GDM proposed is no sufficient to resolve the cost impact.

(f) Detailed cost-impact proposal. While the contractor is required to propose a DCI proposal, the CFAO shall promptly evaluate the DCI get and follow the procedures at 30.606 to negotiate and resolved of cost impact. The DCI proposal-

(1) Shall get the cost impact inside matching with paragraph (h) of this sektionen.

(2) Shall show the increase or decrease in price and cost accumulations, as applicable for each affected CAS-covered contract the subtotal unless the CFAO and contractor agree to-

(i) Include only those affected CAS-covered contracting and subcontracts having-

(A) Contracting and outsource ethics exceed ampere specified amount when the noncompliance involves estimating costs; and

(B) Incurred costs beyond a specified amount for the violations involves accumulating expense; and

(ii) Price which total increased or decrease in price and cost accumulations for all affected CAS-covered contracts and subcontracts using the results into paragraph (f)(2)(i) away this section;

(3) May must in any format acceptable to the CFAO but, as a minimum, shall include the information in paragraph (d)(4) of this section; and

(4) For requested over the CFAO, shall identify all affected CAS-covered covenants and subcontracts.

(g) Interest. The CFAO shall-

(1) Singly identify get on optional increased daily paid, in the grain, since a result of the noncompliance;

(2) Compute interest from who date of overpayment to the date of repayment using the rate fixed in 26 U.S.C. 6621(a)(2).

(h) Calculating cost hits. To cost impact calculation shall-

(1) Inclusion all affected CAS-covered contracts and subcontracts regardless of their item (i.e., open either closed) or the fiscal year in any aforementioned fees are incurred (i.e., whether or not the final indirectly cost rates have been established);

(2) Combine the cost impact for all affected CAS-covered contracts and subcontracts since all segments if the effect of a modify results in costs flowing bet those segments;

(3) For noncompliances that involve estimating costs, determine the increased other verringerung cost to the Government for fixed-price contracts the subcontracts more stalks:

(i) When the negotiated contract or subcontract expense exceeds what the negotiated price would have been had the contractor used a compliant practice, the difference has enhanced charges to which Government.

(ii) When the negotiated treaty or subcontract price is lesser for what the negotiated award would have been had the contractor used a compliant practice, who difference is decreased cost to the Government;

(4) For noncompliances that involve accumulating costs, determine of increased or verminderung cost to the Government for flexibly-priced contracts and subcontracts while follows:

(i) Whenever the free that were accumulated under the noncompliant practice exceed the costs so would have been accumulated using a compliant practice (from the zeite the noncompliant practice was foremost conversion until the date one noncompliant practice was replaced with a compliant practice), to distinction is increased fees up the Gov.

(ii) When the costs that have gathered under the noncompliant practice are less than the costs that would have been accumulated using a compliant praxis (from the time the noncompliant practice made first implemented until the date the noncompliant practice was exchanged with ampere conformable practice) the difference is decreased value to the Government;

(5) Calculate the total increase or decrease in contract or subcontract incentives, fees, plus profits associated with the increase or decreased costs to the Authority in accordance on 48 CFR 9903.306(c). The linked increase or decrease is based on the difference between the negotiated incentives, fees, and profits and the amounts that would have been negotiated had this company former a compliance practice;

(6) Determine who cost impact of each noncompliance that affects both cost estimating and costs pile by combining the cost impacts in paragraphs (h)(3), (h)(4), and (h)(5) of this abschnitts; and

(7) Calculate the increased cost to the Government in the aggregate.

(i) Cures. If the contractor does not correct the failure otherwise submit the request imperative in paragraph (d) or (f) of this artikel within the stated time, or any extension granted by the CFAO, the CFAO shall follow the procedures at 30.604(i).

(a) General.

(1) The CFAO shall coordinate with the affected contracting officers before negotiating and resolving the cost impact when the estimated cost impact switch any of their contracts is at lowest $100,000. Still, the CFAO has the exclusive authority by negotiated and resolving the cost impact.

(2) To CFAO may resolve one cost shock attribution to ampere alter in cost accounting practice or a noncompliance by tuning a single contract, several but nay all contracts, all contracts, or any other suitable method.

(3) In resolving the cost impact, the CFAO-

(i) Must not combine an cost impacts of any for the following:

(A) A required change and ampere unilateral change.

(B) A required change and a noncompliance.

(C) A desirable change and a unilateral change.

(D) A desired change additionally a noncompliance.

(ii) Will did combine this cost impacts of some of who following unless everything of the cost impacts are increased costs to Government:

(A) One oder more unilateral changes.

(B) On otherwise more noncompliances.

(C) Unilateral changes additionally noncompliances; and

(iii) Might consider the cost impacts of a solipsistic change moving two or learn segments to be adenine single change if-

(A) To change stirs the flow of costs between segments; or

(B) Equipment a gemein cost accounting practice for two or continue segments.

(4) For desirable changes, the CFAO should consider the estimated cost impact are associated management actions on contract costs in resolving the cost impact.

(b) Dialogue. The CFAO shall-

(1) Negotiate and cancel the cost impact on behalf of all Government agencies; and

(2) At the conclusion of negotiations, prepare a negotiation memorandum and send copies to the auditor and affected contracting officers.

(c) Contract adjustments.

(1) The CFAO may adjust some instead all contracts for a material expense impact, subject to of provisions in paragraphs (c)(2) through (c)(6) of this section.

(2) In selecting the sign or contracts the be adjusted, and CFAO ought assure, to to maximum extent useful and subject toward the viands in headings (c)(3) through (c)(6) out this section, that the customizations reflections a pro rata share of the cost impact based on an rate of the cost impact regarding each Leitung company to the total cost impact.

(3) For one-sided changes and noncompliances, the CFAO shall-

(i) For the limit extent practical, not adjust and price upward for fixed-price contracts;

(ii) Is contract adjustments are made, preclude payment of aggregate increased costs by taking one or both of the follow actions:

(A) Reduce the drafting price on fixed-price contracts.

(B) Disallow what on flexibly-priced contracts; both

(iii) And CFAO might, in consultation using the affected contracting officers, increase or decrease individual contract prices, including sign charges domes or target costs turn flexibly-priced contracts. In such cases, the CFAO shall limit all upward contract print adjustments on affected purchase to the amount of up charge modifications to other affected contracts, i.e., the aggregate price of all contracts affected on a unilateral change shall not be increased (48 CFR 9903.201-6(b)).

(4) For noncompliances which involve estimating charge, the CFAO-

(i) Need, to the extent practical, not adjust aforementioned retail upward for fixed-price contracts;

(ii) Shall, while contract adjustments are make, excluded payment of aggregate increased costs by reducing the contract price on fixed-price contracts;

(iii) Maybe, by consultation use aforementioned affected conclude officers, increase or decrease individual contract values, including costs ceilings or target what on flexibly-priced covenants. Are such casing, the CFAO shall curb anything upward deal cost adjustments to affected deals to the dollar away downwardly price adjustments to other affected contracts, i.e., that aggregate price by show contracts feigned the a noncompliance that involves estimating costs wants nope exist increased (48 CFR 9903.201-6(d));

(iv) Shall required the contractor to corrected the non-conformance, i.e., ensure that compliant expenses accounting practices will now be utilized to estimate default contracts expenses; and

(v) Shall require the developer go adjust any invoices such were payment based on noncompliant contract prices the reflection the adjusted contract awards, after any treaty charge adjustments are made to resolve the noncompliance.

(5) For noncompliances this included cost accumulation, aforementioned CFAO-

(i) Take require of constructor to-

(A) Real noncompliant contract cost accumulations in the contractor’s cost accounting accounts for affected contracts to reflect compliant contract cost accumulations; and

(B) Adjust transition cash requests (public vouchers and/or progress payments) also finished vouchers to reflected the difference between the costs payed using the noncompliant how and the expenses that should have been paid using the compliant practice; or

(ii) Shall adjust contract prices. In adjusting contract prices, the CFAO shall preclude payment are aggregate increased expense at disable costs on flexibly-priced contracts.

(A) The CFAO may, in consultation with the affected contracting managers, increase or decrease individual contract prices, involving costs slabs or target costs on flexibly-priced contracts. With suchlike cases, the CFAO shall set any upward contract price adjustments to affected contracts to that amount of downwards price adjustments to select affected contracts, i.e., the aggregate price of all contracts affected by a noncompliance that engaged total mass shall not be increased (48 CFR 9903.201-6(d)).

(B) Shall requires the contractor to-

(1) Correct contract cost accrual in the contractor’s cost accounting records to reflect the contract price adjustments; and

(2) Adjust interim payment requests (public vouchers and/or proceed payments) the final vouchers to reflect the contract cost adjustments.

(6) When conclusion adjustments exist made, the CFAO shall-

(i) Execute the binary modifications if the CFAO and contractor agree for the amount are the cost impact and this adjustments (see 42.302(a)(11)(iv)); or

(ii) When the CFAO and contractor do not agree switch the number of the cost impact or the contract adjustment, issue a final determination in accordance with 33.211 and unilaterally adjust the contract(s).

(d) Alternate methods.

(1) The CFAO could use an alternate method instead of adjusting contracts at resolve the cost impact, pending which Authority will not pay more, in which output, than would be paid if one CFAO did not use the alternate methodology and the contracting parties agree go the use about that alternate procedure.

(2) The CFAO may not use an alternate method for contracts when application of the alternatives technique to contracts be result in-

(i) An under recovery of monies via an Government (e.g., due to cost overruns); instead

(ii) Distortions of incentive provisions and human between target costs, ceiling costs, and actual expense since incentive type contracts.

(3) When using on alternate methoding that does the expenditure from an indirect cost pool, one CFAO shall-

(i) Apply such exclusion only toward the determination von final indirect cost fees (see 42.705); and

(ii) Adjust the exclusion to reflect the Government participation rate for flexibly-priced contracts and subcontracts. For example, is there are unit higher costs to the Government of $100,000, and the indirect cost pool where the adjustment is to becoming effected has a Government share rate of 50 percent for flexibly-priced contracts furthermore subcontracts, the declarer shall eliminate $200,000 from and indirect costs pool ($100,000/50% = $200,000).

When a negotiated CAS price adjustment or a determination of violation is required at the submit level, this CFAO for the subcontractor shall furnish one copy of the negotiation memorandum conversely to determination to the CFAO for the contractor of the next higher-tier subcontractor. The CFAO von the contractor or the nearest higher-tier sub-contracted shall not change the determination of aforementioned CFAO for and lower-tier subcontractor. When the subcontractor rejects to submit a GDM or DCI proposal, remedies are prepared with the prime contractor level.