OMB Bumps Up Cost Accounting Thresholds, Yawns Ensue
Published Date: 9/1/2026
Rule
Summary
The Office of Management and Budget (OMB), Cost Accounting Standards Board (Board), is publishing a final rule to increase the Cost Accounting Standards (CAS) thresholds and agency waiver authority, and issue clarifications on application of the CAS thresholds and exemptions to indefinite delivery contracts (IDCs).
Analyzed Economic Effects
5 provisions identified: 4 benefits, 0 costs, 1 mixed.
Basic CAS Threshold Raised to $35M
The basic Cost Accounting Standards (CAS) applicability threshold is raised from $2.5 million to $35 million and the $7.5 million trigger-contract concept is eliminated. This change was codified by the 2026 NDAA (Section 1806) and takes effect October 1, 2026.
Full CAS Coverage Thresholds Doubled to $100M
The thresholds for full CAS coverage and Disclosure Statement requirements are raised from $50 million to $100 million, effective October 1, 2026. The rule eliminates a segment-level Disclosure Statement exemption (CAS 9903.202-1(c)(ii)) and clarifies that Disclosure Statements are required only for business units or segments that independently meet the thresholds.
Agency Head CAS Waiver Raised to $100M
The rule raises the authority threshold for an executive agency head to waive CAS from $15 million to $100 million. This change is implemented in CAS 9903.201-5 and is effective October 1, 2026.
How CAS Applies to Indefinite Delivery Contracts
For multiple-award indefinite delivery contracts (IDCs), CAS exemptions and monetary thresholds are determined at the individual task or delivery order level using the ceiling value of each task or order. For single-award IDCs, CAS applicability is determined at the time of award of the IDC using the IDC ceiling value; an entire single-award IDC can be exempt if it only provides for commercial products/services or only allows firm-fixed-price orders awarded on adequate price competition without certified cost or pricing data. These rules take effect October 1, 2026.
Transition to Modified Coverage Starting Oct 1, 2026
Contractors or subcontractors subject to full CAS coverage based on the pre-October 1, 2026 $50 million threshold may transition affected contracts to modified coverage at the start of their next full cost accounting period beginning on or after October 1, 2026, provided the business unit has no unresolved CAS noncompliances and does not meet the $100 million criteria. They may use this modified-coverage status for determining and certifying eligibility for new solicitations and awards on or after October 1, 2026.
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Key Dates
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