Sec. 1824. Matters related to cost accounting standards
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Not later than 90 days after the date of the enactment of this Act, the Secretary of Defense, in consultation with Cost Accounting Standards Board established under section 1501 of title 41, United States Code, shall— identify actions necessary to streamline requirements for compliance with the cost accounting standards established under section 1502 of title 41, United States Code (in this section referred to as CAS ), in the performance of a contract with the Department of Defense; and reduce or eliminate such requirements under the circumstances described in paragraph
(2)for contracts entered into after the date that is 180 days after the date of the enactment of this Act. The circumstances described in this paragraph are as follows: With respect to an action to eliminate compliance with CAS, if reliance on a similar requirement under generally accepted accounting principles (in this section referred to as GAAP ) would achieve, to the maximum extent possible, the use of commercial accounting standards and systems with respect to such elimination without bias or prejudice to parties to a contract. If other existing requirements in guidance or regulation will sufficiently protect the interests of the Secretary of Defense in the oversight of cost contracts. If such requirement is no longer necessary or appropriate. Not later than 180 days after the date of the enactment of this Act, the Administrator for Federal Procurement Policy shall revise the rules and procedures prescribed pursuant to subsections
(a)and
(b)of section 1502 of title 41, United States Code, to the extent necessary to increase the thresholds established in section 9903.201-2 of title 48, Code of Federal Regulation, from $50,000,000 to $100,000,000. Not later than 120 days after the date of the enactment of this Act, the Secretary shall update the Department of Defense Supplement to the Federal Acquisition Regulation to require full compliance with CAS only for an entity or subsidiary of an entity that— received a single contract award under CAS with a value equal to or greater than $100,000,000; or received contracts during the cost accounting period that ended preceding the date of the report with an aggregate value equal to or greater than $100,000,000. Subsection
(a)of section 1501 of title 41, United States Code, is amended by striking Office of Federal Procurement Policy and inserting Office of Management and Budget . Subsection
(b)of such section 1501 is amended— by amending paragraph
(1)to read as follows: The Board shall consist of 5 voting members and 2 nonvoting members. One voting member is the Administrator of Federal Procurement Policy, who serves as Chairman. The other 4 members, all of whom shall have experience in Federal Government contract cost accounting, are as follows: 2 representatives of the Federal Government, each of whom has substantial experience in administering and managing covered contracts— one of whom is a representative of the Department of Defense appointed by the Secretary of Defense; and one of whom is an officer or employee of the General Services Administration appointed by the Administrator of General Services. 2 individuals from the private sector, each of whom is appointed by the Director of the Office of Management and Budget— one of whom is a senior employee or retired senior employee of a Government contractor with substantial experience in the private sector involving administration and management of covered contracts; and one member of the accounting profession, with substantial experience as an accountant. The 2 nonvoting members of the Board shall be appointed as follows: 1 individual who is a senior employee of the Government Accountability Office with substantial experience in contracting and national security acquisitions, appointed by the Comptroller General of the United States. 1 individual from academia, a nonprofit organization, or a private entity with substantial experience in establishing financial accounting and reporting standards in compliance with Generally Accepted Accounting Principles, appointed by the Director of the Office of Management and Budget. ; in paragraph (2)— in subparagraph (A), by inserting , which may be extended for an additional 4-year period by the individual who appointed such member under paragraph
(1)after 4 years ; and in subparagraph (B), by striking paragraph (1)(A) and inserting paragraph (1)(A)(i) ; and by adding at the end the following new paragraph: Beginning on January 1, 2028, an individual who is a member of an audit entity of an executive agency (excluding an audit entity of the Government Accountability Office) is not eligible to serve as a member of the Board. . Subsection
(c)of such section 1501 is amended— in paragraph (2)— by striking within one year and all that follows through conform such standards and inserting the following: not later than 180 days after the date of enactment of this paragraph, and biennially thereafter, review any cost accounting standards established under section 1502 of this title and eliminate or conform such standards ; and by striking and at the end; in paragraph (3), by striking disputes. and inserting the following: disputes, and take necessary action to clarify or improve such standards if misinterpretation or lack of clarity in a standard was a primary component of such dispute; and ; and by adding at the end the following: ensure that any action taken pursuant to paragraph
(3)is not taken solely for the purpose of tailoring such standard to favor a party in the dispute. . Subsection
(e)of such section 1501 is amended— in paragraph (1), by striking and at the end; in paragraph (2), by striking the period at the end and inserting ; and ; and by adding at the end the following new paragraph: a summary of rulemaking activities related to any changes to such standards and any associated timelines for such activities. . Subsection (f)(1)(B) of such section 1501 is amended— by striking may appoint and inserting shall appoint ; and by striking two and inserting not less than four . Such section 1501 is amended by adding at the end the following new subsection: In this section, the term covered contract means a contract that is subject to the cost accounting standards issued pursuant to section 1502 of title 41, United States Code, . Not later than 90 days after the date of the enactment of this Act, the Director of the Office of Management and Budget, the Secretary of Defense, the Administrator of General Services, and the Comptroller General of the United States shall implement the amendments made by this subsection, including making the appointments under section 1501(b) of title 41, United States Code, as amended by this subsection. Section 1502(b)(1) of title 41, United States Code, is amended— in subparagraph (B), by striking amount set forth in section 3702(a)(1)(A) of title 10 as the amount is and inserting $10,000,000, as ; and in subparagraph (C)— in clause (ii), by inserting or at the end; in clause (iii), by striking ; or and inserting a period; and by striking clause (iv). Not later than 180 days after the date of the enactment of this Act, the Administrator for Federal Procurement Policy shall issue such regulations as are necessary to implement the amendments made by this subsection.