[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR30.603-2]



[Page 581]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

                CHAPTER 1--FEDERAL ACQUISITION REGULATION

 

PART 30_COST ACCOUNTING STANDARDS ADMINISTRATION--Table of Contents

 

                     Subpart 30.6_CAS Administration

 

Sec. 30.603-2  Unilateral and desirable changes.



    (a) Unilateral changes. (1) The contractor may unilaterally change 

its disclosed or established cost accounting practices, but the 

Government shall not pay any increased cost, in the aggregate, as a 

result of the unilateral change.

    (2) Prior to making any contract price or cost adjustments under the 

applicable paragraph(s) addressing a unilateral change at 52.230-2, 

52.230-3, or 52.230-5, the CFAO shall determine that--

    (i) The contemplated contract price or cost adjustments will protect 

the Government from the payment of the estimated increased costs, in the 

aggregate; and

    (ii) The net effect of the contemplated adjustments will not result 

in the recovery of more than the increased costs to the Government, in 

the aggregate.

    (b) Desirable changes. (1) Prior to taking action under the 

applicable paragraph(s) addressing a desirable change at 52.230-2, 

52.230-3, or 52.230-5, the CFAO shall determine the change is a 

desirable change and not detrimental to the interests of the Government.

    (2) Until the CFAO has determined a change to a cost accounting 

practice is a desirable change, the change is a unilateral change.

    (3) Some factors to consider in determining if a change is desirable 

include, but are not limited to, whether--

    (i) The contractor must change the cost accounting practices it uses 

for Government contract and subcontract costing purposes to remain in 

compliance with the provisions of Part 31;

    (ii) The contractor is initiating management actions directly 

associated with the change that will result in cost savings for segments 

with CAS-covered contracts and subcontracts over a period for which 

forward pricing rates are developed or 5 years, whichever is shorter, 

and the cost savings are reflected in the forward pricing rates; and

    (iii) Funds are available if the determination would necessitate an 

upward adjustment of contract cost or price.

    (c) Notice and proposal preparation. (1) When a contractor makes a 

unilateral change, the clause at 52.230-6, Administration of Cost 

Accounting Standards, requires the contractor to--

    (i) Submit a description of the change to the CFAO not less than 60 

days (or other mutually agreeable date) before implementation of the 

change; and

    (ii) Submit rationale to support any contractor written statement 

that the cost impact of the change is immaterial.

    (2) If a contractor implements the change in cost accounting 

practice without submitting the notice as required in paragraph (c)(1) 

of this subsection, the CFAO may determine the change a failure to 

follow a cost accounting practice consistently and process it as a 

noncompliance in accordance with 30.605.

    (d) Retroactive changes. (1) If a contractor requests that a 

unilateral change be retroactive, the contractor shall submit supporting 

rationale.

    (2) The CFAO shall promptly evaluate the contractor's request and 

shall, as soon as practical, notify the contractor in writing whether 

the request is or is not approved.

    (3) The CFAO shall not approve a date for the retroactive change 

that is before the beginning of the contractor's fiscal year in which 

the request is made.

    (e) Contractor accounting changes due to external restructuring 

activities. The requirements for contract price and cost adjustments do 

not apply to compliant cost accounting practice changes that are 

directly associated with external restructuring activities that are 

subject to and meet the requirements of 10 U.S.C. 2325. However, the 

disclosure requirements in 52.230-6(b) shall be followed.