CAS Applicability Moves to $35 Million and Full Coverage to $100 Million, Effective 1 October

What changed

On 1 September 2026 the Cost Accounting Standards Board, within OMB's Office of Federal Procurement Policy, published a final rule amending 48 CFR part 9903 (91 FR 56056, RIN 0348-AB85). It takes effect 1 October 2026 and makes four changes.

First, the basic CAS applicability threshold at 9903.201-1(b)(2) rises from $2.5 million to $35 million, and the $7.5 million trigger contract concept is eliminated. The Board states this implements section 1806 of the FY2026 NDAA, which codified an OMB legislative proposal decoupling the CAS threshold from the Truthful Cost or Pricing Data statute. The three statutory exemptions at 9903.201-1(b) were also amended so they can apply to portions of contracts, addressing hybrid contract types.

Second, the threshold for full CAS coverage and for Disclosure Statement submission doubles from $50 million to $100 million across 9903.201-2, 9903.201-3, 9903.201-4 and 9903.202-1. The segment exemption at 9903.202-1(c) is removed and reserved; a Disclosure Statement is now required only for a business unit or segment that independently meets the full-coverage threshold.

Third, agency head waiver authority at 9903.201-5(a) rises from $15 million to $100 million, implementing section 820 of the FY2017 NDAA.

Fourth, a new 9903.201-1(c) sets how the exemptions apply to indefinite delivery contracts. For multiple-award IDCs, applicability is determined at each task or delivery order using that order's ceiling value. For single-award IDCs, it is determined at award of the IDC using the IDC ceiling value, though an entire single-award IDC is exempt if it provides only for commercial products or services, or only for firm-fixed-price orders awarded on adequate price competition without certified cost or pricing data. Commenters opposed the different treatment of single-award IDCs; the Board declined to change it, citing vendor lock-in risk.

Why it matters for estimating and pricing

Whether a business unit is CAS-covered, and whether coverage is full or modified, sits underneath disclosure statements, cost accounting practice change adjustments, and the audit posture behind a basis of estimate. The Board's own analysis of FY2020 through FY2024 data estimates the $100 million full-coverage threshold cuts the number of entities under full coverage from 773 to 564, a roughly 30 percent reduction, while retaining $1.21 trillion of the $1.22 trillion in contract value.

There is a transition mechanism. A contractor or subcontractor under full coverage based on the old $50 million threshold may move to modified coverage at the start of the business unit's next full cost accounting period beginning on or after 1 October 2026, provided the business unit has no unresolved CAS noncompliances and does not meet full coverage at $100 million. The Board expects contractors to keep following existing practices, and states that any cost accounting practice change arising from the transition is unilateral, which carries contract price adjustment consequences.

One item was deliberately left out. The Board declined to address the FY2026 NDAA changes to contract price adjustment requirements at 41 U.S.C. 1503 in this rule, saying that would require additional notice and comment, and has opened a separate case for it.

Primary sources

Final rule, Increase of Monetary Thresholds and Other Matters Related to Cost Accounting Standards Program Requirements, 91 FR 56056 (1 September 2026), FR Doc. 2026-17901: https://www.federalregister.gov/d/2026-17901

Proposed rule, 91 FR 13559 (20 March 2026). Amended text at 48 CFR part 9903.