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jeff4757

CAS compliance

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Have you read the CAS Board's rules?  They tell you which contracts are exempt from the CAS.  Those rules apply to contracts awarded by all agencies, not just DoD.  The rules can be found at Appendix 1 to the FAR at farsite.hill.af.mil.

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You can also find a very useful flowchart in the DCAA Contract Audit Manual in Chapter 8.

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Additionally, and possibly easier, you could look at the contract and see if it contains FAR 52.230-6 and one of 52.230-2, -3, -4 or -5.  If none of those clauses is in the contract, then it's probably exempt, assuming the contracting officer didn't overlook the requirement.

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Navy, that may or may not be a good indicator.  In my experience, too many times contracting officers include the CAS clauses as a matter of course, even in exempt contracts.  There is no substitute for knowing what the rules are.

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Retread,

I agree that there is no substitute for knowing what the rules are, and if you know the rules, you won't accept a contract that includes the CAS clauses if it's exempt.  But if you want to know if a contract is exempt or not, I still think looking to see if the CAS clauses are in the contract is a good place to start, even if it may not necessarily be the best place to finish.

I expect COs may include 52.230-2 because it's basically self-deleting when the contract meets one of the exemptions, but I'm not sure the others (52.230-3, -4 and -5) are quite so straightforward.  Are you seeing those others being included routinely?

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Navy,

As I recall (and it's been a few years), when the new CAS clauses were issued, the FAR Council clearly stated in the promulgating comments that the clauses were NOT self-deleting. I know a lot of practitioners think they are, and the clause could certainly be read to be self-deleting, but the FAR Council said no. (As least to my recollection.)

At the prime level, this is not a very prevalent problem; but at the subcontract level it certainly is.

H2H

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H2H,

FAR 52.230-2 starts out:

Quote

(a) Unless the contract is exempt under 48 CFR 9903.201-1 and 9903.201-2, the provisions of 48 CFR part 9903 are incorporated herein by reference and the Contractor, in connection with this contract, shall—...

The way I read that, if the contract IS exempt under 48 CFR 9903.201-1 and 9903.201-2, the provisions of 48 CFR part 9903 are NOT incorporated into the contract. Is it overly simplistic or an exaggeration to call that basically self-deleting?  

 

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Navy,

When I posted "the clause could certainly be read to be self-deleting" I was agreeing that the clause could be read to be self-deleting. However, my understanding is that the FAR Councils disagreed -- publicly, in writing -- with that interpretation.

H2H

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Contracting people are supposed to be skilled at using clear and unambiguous language.

There is no such thing as a "self-deleting" FAR clause. In order for a clause to be "self" deleting, it would have to include language in itself saying that it is deleted or that it is deleted under certain circumstances. There is no such FAR clause, nor has any board of contract appeals or the COFC held that any FAR clause was self-deleting.

The term "self-deleting" appears only once in the entire FAR System, in FAR 52.230-6, "Administration of Cost Accounting Standards (JUN 2010), in paragraph (l), which prohibits the use of such clauses in CAS-covered subcontracts:

 
Quote

(l) For all subcontracts subject to the clauses at FAR 52.230-2, 52.230-3, 52.230-4, or 52.230-5—

(1) So state in the body of the subcontract, in the letter of award, or in both (do not use self-deleting clauses)....
Emphasis added.
 
The term "self-deleting" has appeared in only 12 board decisions. In the most recent, the ASBCA found that a master solicitation provided that clauses in the solicitation were "self-deleting" if not applicable. See DCS-CHOL Enterprises, Inc., ASBCA 54707, 08-2 BCA ¶ 33889 (June 8, 2008).
 
Quote

The contract was an indefinite delivery, indefinite quantity type contract that incorporated various standard clauses contained in the June 1999 version of the Defense Supply Service Columbus (DSSC) Master Solicitation (R4, tab 1 at 1 of 5, 13 of 21). Some of the clauses in the DSCC Master Solicitation became “self-deleting” if not applicable (Bd. corr. ltr. dtd. 3 March 2005 at 1 of 9).

Emphasis added. The board did not provide a quote, so I don't know exactly what the master solicitation said or whether the reference was to non-FAR clauses that included self-deleting language.

One board rejected an argument that an agency's special clause was self-deleting, because the clause itself did not say so. See TEM Assocs., Inc. DOTCAB 2556, 93-2 BCA ¶ 25759 (January 27, 1993).

Quote

The Incremental Funding clause of the contract (Finding 3) contained no self-deleting provision; accordingly, the first sentence of the second paragraph quoted above (establishing a prohibition against voluntarily continuing when funds were exhausted) survived the full funding of the contract.

Emphasis added.

"Self-deleting" is sloppy language and thinking.  The proper terms are applicable and inapplicable or required and not required. There is no self-deleting (or, for that matter, self-inserting) with respect to FAR clauses. The boards and the COFC use the term inapplicable, and so should we.

With reference to a contract clause, "self-deleting" has appeared in only two GAO decisions. In one (1980) it was only paraphrasing the protester's assertion about what an agency had said. In the other (1971) it said:

Quote

ALTHOUGH WE RECOGNIZE CERTAIN MERIT IN THE CONTENTION THAT ARTICLE 30 AND ARTICLE 42 ARE SELF-DELETING, DEPENDING ON THE TYPE OF CONTRACT INVOLVED, THIS CASE ILLUSTRATES THE LIKELIHOOD OF CONFUSION WHEN THE TYPE OF CONTRACT ANTICIPATED IS NEITHER SPECIFIED NOR CLEARLY EVIDENT. IT IS THEREFORE RECOMMENDED THAT FUTURE PROCUREMENTS, IN WHICH CONTRACT TERMS NO. 1 IS INCORPORATED BY PROVISIONS SUCH AS PARAGRAPH 6.01, SPECIFICALLY DELETE INAPPLICABLE ARTICLES AND IDENTIFY THE TYPE OF CONTRACT CONCERNED.

Capitalization in original. Emphasis added. So GAO didn't like the concept of "self-deleting" clauses. The GAO uses inapplicable.

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Navy, I think you are making my point that the inclusion of 52.230-2, or any other CAS clause in a contract is not necessarily a good indicator that the contract is CAS covered.  The prescriptive language for use of that clause says include it in contracts unless the contract is exempt or subject to modified CAS coverage. However, using your interpretation of the clause, it only applies if the contract is not exempt or not subject to modified CAS coverage despite being included in the contract.  Thus, to determine if the clause applies, the clause itself implicitly requires a determination that the contract is not exempt or not subject to modified CAS coverage after the clause has been included in a contract.

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Retread,

Yes, I agree. Nevertheless, when presented with a question about a specific contract, my first inclination is to read the contract and see what it says (or doesn't say.)  I frequently find the answer right away.  In this case, though, it may not be determinative just to see that the CAS clause is included.  I wonder if the reverse is true - if the contract doesn't include any CAS clauses, can you conclude that the contract is exempt?  Or is it possible that if the contracting officer inadvertently omitted the CAS clauses, the Christian doctrine will read them in?

 

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Navy,

You can't rely solely on the clauses or lack of clauses to determine CAS coverage. At a minimum, you also need to review the Section K Reps & Certs that were submitted by the contractor, to review the CAS statements (or elections) made therein.

H2H

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Thus, to determine if the clause applies, the clause itself implicitly requires a determination that the contract is not exempt or not subject to modified CAS coverage after the clause has been included in a contract.

You can't rely on the presence or absence of any contract clause to determine the applicability of any policy to a particular contract, because it depends on whether the CO properly applied the prescription for the implementing clause. If a clause prescription includes specific applicability requirements or states bases for exemption, as many do, and if the CO did not properly apply them and thus exceeded his or her authority, then a court might read the clause into or out of the contract. You all know Christian, and for an example of the latter case, see Charles Beseler Co., ASBCA 22669, 78-2 CPD ¶ 13483.

But you always start the process of interpreting a contract by reading the contract.

 

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