48 C.F.R. PART 230—COST ACCOUNTING STANDARDS ADMINISTRATION
Title 48 - Federal Acquisition Regulations System
Authority: 41 U.S.C. 421 and 48 CFR chapter 1.
Source: 56 FR 36406, July 31, 1991, unless otherwise noted.
(a)(1)(A) The military departments— (1) May grant CAS waivers that meet the conditions in FAR 30.201–5(b); and (2) Unless otherwise authorized by the Director of Defense Procurement and Acquisition Policy, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics), must submit each CAS waiver request to the Director of Defense Procurement and Acquisition Policy for review at least 14 days before granting the waiver. (B) DoD contracting activities that are not within a military department must submit CAS waiver requests that meet the conditions in FAR 30.201–5(b) to the Director of Defense Procurement and Acquisition Policy for approval at least 30 days before the anticipated contract award date. (2) The military departments must not delegate CAS waiver authority below the individual responsible for issuing contracting policy for the department. (e)(i) by November 15th of each year, the military departments must provide a report of all waivers granted under FAR 30.201–5(a) during the previous fiscal year to the Director of Defense Procurement and Acquisition Policy. (ii) The Director of Defense Procurement and Acquisition Policy will submit a consolidated DoD report to the CAS Board. [65 FR 36035, June 6, 2000, as amended at 68 FR 7440, Feb. 14, 2003] (a) The contracting officer will estimate the facilities capital cost of money and capital employed using— (1) An analysis of the appropriate Forms CASB-CMF and cost of money factors; and (2) DD Form 1861, Contract Facilities Capital Cost of Money. The DD Form 1861 provides a means of linking the Form CASB-CMF and DD Form 1547, Record of Weighted Guidelines Application. It— (a) Enables the contracting officer to differentiate profit objectives for various types of assets (land, buildings, equipment). The procedure is similar to applying overhead rates to appropriate overhead allocation bases to determine contract overhead costs. (b) Is designed to record and compute the contract facilities capital cost of money and capital employed which is carried forward to DD Form 1547. Complete a DD Form 1861 only after evaluating the contractor's cost proposal, establishing cost of money factors, and establishing a prenegotiation objective on cost. Complete the form as follows: (a) List overhead pools and direct-charging service centers (if used) in the same structure as they appear on the contractor's cost proposal and Form CASB-CMF. The structure and allocation base units-of-measure must be compatible on all three displays. (b) Extract appropriate contract overhead allocation base data, by year, from the evaluated cost breakdown or prenegotiation cost objective and list against each overhead pool and direct-charging service center. (c) Multiply each allocation base by its corresponding cost of money factor to get the facilities capital cost of money estimated to be incurred each year. The sum of these products represents the estimated contract facilities capital cost of money for the year's effort. (d) Total contract facilities cost of money is the sum of the yearly amounts. (e) Since the facilities capital cost of money factors reflect the applicable cost of money rate in Column 1 of Form CASB-CMF, divide the contract cost of money by that same rate to determine the contract facilities capital employed. To establish cost and price objectives, apply the facilities capital cost of money and capital employed, as determined under 230.7000, as follows: (a) Cost of Money—(1) Cost Objective. Use the imputed facilities capital cost of money, with normal, booked costs, to establish a cost objective or the target cost when structuring an incentive type contract. Do not adjust target costs established at the outset even though actual cost of money rates become available during the period of contract performance. (2) Profit Objective. When measuring the contractor's effort for the purpose of establishing a prenegotiation profit objective, restrict the cost base to normal, booked costs. Do not include cost of money as part of the cost base. (b) Facilities Capital Employed. Assess and weight the profit objective or risk associated with facilities capital employed in accordance with the profit guidelines at 215.404–71–4. [56 FR 36406, July 31, 1991, as amended at 63 FR 55052, Oct. 14, 1998] (a) The contractor may include contract facilities capital cost of money in cost reimbursement and progress payment invoices. To determine the amount that qualifies as cost incurred, multiply the incurred portions of the overhead pool allocation bases by the latest available cost of money factors. These cost of money calculations are interim estimates subject to adjustment. (b) As actual cost of money factors under CAS 414 and FAR 31.205–10 are finalized, use the new factors to calculate contract facilities cost of money for the next accounting period. (a) Contract facilities capital cost of money for final cost determination or repricing is based on each year's final cost of money factors determined under CAS 414 and supported by separate Forms CASB-CMF. (b) Separately compute contract facilities cost of money in a manner similar to yearly final overhead rates. Also like overhead costs, include in the final settlement an adjustment from interim to final contract cost of money. Do not, however, adjust estimated or target cost. (a) Forms CASB-CMF are normally initiated by the contractor under the same circumstances as Forward Pricing Rate Agreements (see FAR Subpart 42.17) and evaluated as complementary documents and procedures. (b) Separate forms are required for each prospective cost accounting period of contract performance. (c) The contractor may submit annually or with individual contract price proposals, as agreed with the administrative contracting officer (ACO). (d) The contractor must submit a final form under CAS 414 as soon as possible after the end of each accounting period, together with a proposal for actual overhead costs and rates. [56 FR 36406, July 31, 1991, as amended at 63 FR 55052, Oct. 14, 1998] (a) The contracting officer may ask the ACO to complete the forms as part of field pricing support. (b) When the Weighted Guidelines Method is used, completion of the DD Form 1861 requires information not included on the Form CASB-CMF, i.e., distribution percentages of land, building, and equipment for the business unit performing the contract. Choose the most practical method for obtaining this information, for example— (1) Contract administration offices could obtain the information through the process used to establish factors for facilities capital cost of money or could establish advance agreements on distribution percentages for inclusion in field pricing reports; (2) The corporate ACO could obtain distribution percentages; or (3) The contracting officer could request the information through a solicitation provision. (a) Intangible capital asset is an asset that has no physical substance, has more than minimal value, and is expected to be held by an enterprise for continued use or possession beyond the current accounting period for the benefit it yields. (b) Tangible capital asset is an asset that has physical substance, more than minimal value, and is expected to be held by an enterprise for continued use or possession beyond the current accounting period for the service it yields. (c) Cost of money rate is either— (1) The interest rate determined by the Secretary of the Treasury under Public Law 92–41 (85 Stat. 97); or (2) The time-weighted average of the interest rate for each cost accounting period during which the asset is being constructed, fabricated, or developed. (d) Representative investment is the calculated amount considered invested by the contractor during the cost accounting period to construct, fabricate, or develop the asset. (a) The interest rate in 230.7100(c)(1) is established semi-annually and is published in the (b) To calculate the time-weighted average interest rate— (1) Multiply the various rates in effect during the months of construction by the number of months each rate was in effect; and (2) Divide the sum of the products by the total number of months in which the rates were experienced. (a) The calculation of the representative investment requires consideration of the rate or expenditure pattern of the costs to construct, fabricate, or develop a capital asset. (b) If a majority of the costs were incurred toward the beginning, middle, or end of the cost accounting period, the contractor shall either— (1) Determine a representative investment amount for the cost accounting period by calculating the average of the month-end balances for that cost accounting period; or (2) Treat month-end balances as individual representative investment amounts. (c) If the costs were incurred in a fairly uniform expenditure pattern throughout the construction, fabrication, or development period, the contractor may— (1) Determine a representative investment amount for the cost accounting period by averaging the beginning and ending balances of the construction, fabrication, or development cost account for the cost accounting period; or (2) Treat month-end balances as individual representative investment amounts. (a) Determine the imputed cost of money for an asset under construction, fabrication, or development by applying a cost of money rate (see 230.7101–1) to the representative investment amount (see 230.7101–2). (1) When a representative investment amount is determined for a cost accounting period in accordance with 230.7101–2(b)(1) or 230.7101–2(c)(1), the cost of money will be the time-weighted average rate. (2) When a monthly representative investment amount is used in accordance with 230.7101–2(b)(2) or 230.7101–2(c)(2), the cost of money will be the interest rate in effect each month. (Under this method, the cost of money is determined monthly and the total for the cost accounting period is the sum of the monthly amounts.) (b) The imputed cost of money will be capitalized only once in any cost accounting period, either at the end of the period or at the end of the construction, fabrication, or development period, whichever comes first. (c) When the construction of an asset takes more than one cost accounting period, the cost of money capitalized for the first cost accounting period will be included in determining the representative investment amount for any future cost accounting periods. An offset to the profit objectives as set forth in FAR 15.404–4 is not required for CAS 417 cost of money. [56 FR 36406, July 31, 1991, as amended at 63 FR 55052, Oct. 14, 1998]
Title 48: Federal Acquisition Regulations System
PART 230—COST ACCOUNTING STANDARDS ADMINISTRATION
Section Contents
230.201-5 Waiver.
230.7000 Contract facilities capital estimates.
230.7001 Use of DD Form 1861.
230.7001-1 Purpose.
230.7001-2 Completion instructions.
230.7002 Preaward facilities capital applications.
230.7003 Postaward facilities capital applications.
230.7003-1 Interim billings based on costs incurred.
230.7003-2 Final settlement.
230.7004 Administrative procedures.
230.7004-1 Forms CASB-CMF.
230.7004-2 DD Form 1861.
230.7100 Definitions.
230.7101 Calculations.
230.7101-1 Cost of money.
230.7101-2 Representative investment.
230.7102 Determining imputed cost of money.
230.7103 Preaward capital employed application.
Subpart 230.2—CAS Program Requirements
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230.201-5 Waiver.
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Subpart 230.70—Facilities Capital Employed for Facilities in Use
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230.7000 Contract facilities capital estimates.
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230.7001 Use of DD Form 1861.
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230.7001-1 Purpose.
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230.7001-2 Completion instructions.
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230.7002 Preaward facilities capital applications.
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230.7003 Postaward facilities capital applications.
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230.7003-1 Interim billings based on costs incurred.
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230.7003-2 Final settlement.
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230.7004 Administrative procedures.
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230.7004-1 Forms CASB-CMF.
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230.7004-2 DD Form 1861.
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Subpart 230.71—Facilities Capital Employed for Facilities Under Construction
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230.7100 Definitions.
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230.7101 Calculations.
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230.7101-1 Cost of money.
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230.7101-2 Representative investment.
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230.7102 Determining imputed cost of money.
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230.7103 Preaward capital employed application.
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