FAR 30.001—Definitions.
Plain-English Summary
FAR 30.001 is the definitions section for the Cost Accounting Standards (CAS) part of the FAR, and it supplies the terms that control how CAS coverage, cost accounting practice changes, and related contract pricing consequences are understood throughout Part 30. It defines what counts as an affected CAS-covered contract or subcontract, who the cognizant Federal agency official (CFAO) is, and the key categories of cost accounting practice changes: desirable changes, required changes, and unilateral changes. It also distinguishes fixed-price contracts and subcontracts from flexibly-priced contracts and subcontracts, because that distinction matters when determining whether costs are adjusted based on actual costs incurred and how CAS impacts flow through different contract types. In addition, it defines noncompliance, which is central to identifying CAS violations and inconsistent estimating, accumulating, or reporting practices. Practically, these definitions determine when a contractor must disclose or change practices, when the Government may or may not recover increased costs, and which contracting officer has authority to administer CAS matters. For contractors and contracting officers, this section is foundational because every CAS analysis, notice, and cost impact determination depends on using these terms correctly.
Key Rules
Affected CAS-covered contracts
A contract or subcontract is “affected” when a contractor or subcontractor either uses one cost accounting practice to estimate costs and a different changed practice to accumulate and report costs, or uses a noncompliant practice for estimating or for accumulating and reporting costs. This definition identifies the contracts and subcontracts to which CAS cost impact rules apply.
CFAO authority
The cognizant Federal agency official is the contracting officer assigned by the cognizant Federal agency to administer CAS. This official is the Government’s point of authority for CAS administration, including determinations tied to cost accounting practice changes and compliance matters.
Desirable changes
A desirable change is a compliant change to established or disclosed cost accounting practices that the CFAO finds desirable and not detrimental to the Government. If the CFAO makes that finding, the change is not subject to the CAS no-increased-cost prohibition for affected CAS-covered contracts and subcontracts.
Fixed-price versus flexibly-priced
The definition separates fixed-price contracts and subcontracts from flexibly-priced ones based on whether final payment is tied to actual costs incurred. This distinction matters because CAS cost impacts and pricing consequences differ depending on whether the contract price is fixed or can be adjusted based on actual costs.
Noncompliance
Noncompliance means a failure in estimating, accumulating, or reporting costs that does not comply with applicable CAS or does not consistently follow disclosed or established cost accounting practices. This is the core definition used to identify CAS violations and inconsistent accounting treatment.
Required changes
A required change is a change a contractor must make to comply with applicable Standards, modifications, or interpretations that become applicable to an existing CAS-covered contract or subcontract because the contractor receives another CAS-covered contract or subcontract. It also includes a prospective change the CFAO determines is necessary to keep the contractor in compliance when the prior practice was compliant.
Unilateral changes
A unilateral change is a contractor-initiated change from one compliant practice to another compliant practice that is not deemed desirable by the CFAO. For these changes, the Government will pay no aggregate increased costs, which makes the cost impact consequences especially important.
Responsibilities
Contracting Officer / CFAO
Administer CAS for the cognizant Federal agency, determine whether a compliant change is a desirable change, decide when a prospective change is required to maintain compliance, and apply the CAS cost-impact consequences tied to the type of change.
Contractor
Use consistent and compliant cost accounting practices for estimating, accumulating, and reporting costs; identify when a practice change is unilateral, required, or potentially desirable; and ensure disclosed or established practices remain aligned with CAS requirements.
Subcontractor
Follow applicable CAS rules and disclosed or established practices when subject to CAS coverage, and recognize when a subcontract becomes affected by a changed or noncompliant practice.
Government / Agency
Through the cognizant agency structure, oversee CAS administration and enforce the rules governing cost accounting practice changes, noncompliance, and cost impacts on affected CAS-covered contracts and subcontracts.
Practical Implications
These definitions drive whether a contractor owes a CAS cost impact analysis and whether the Government can seek reimbursement for increased costs on affected contracts and subcontracts.
The fixed-price versus flexibly-priced distinction is critical in practice because it affects whether final payment depends on actual costs incurred, which in turn affects how CAS impacts flow through contract pricing.
A common pitfall is treating any accounting change as harmless; under CAS, even a compliant change can trigger cost-impact consequences unless it is found desirable by the CFAO or required for compliance.
Another frequent issue is inconsistent treatment between estimating and accumulating/reporting costs, which can create an affected contract situation even if the underlying practice is otherwise compliant.
Contractors should document whether a change is required, desirable, or unilateral before implementation, because the label affects both approval expectations and whether increased costs may be recoverable.
Official Regulatory Text
As used in this part- Affected CAS-covered contract or subcontract means a contract or subcontract subject to Cost Accounting Standards (CAS) rules and regulations for which a contractor or subcontractor- (1) Used one cost accounting practice to estimate costs and a changed cost accounting practice to accumulate and report costs under the contract or subcontract; or (2) Used a noncompliant practice for purposes of estimating or accumulating and reporting costs under the contract or subcontract. Cognizant Federal agency official (CFAO) means the contracting officer assigned by the cognizant Federal agency to administer the CAS. Desirable change means a compliant change to a contractor’s established or disclosed cost accounting practices that the CFAO finds is desirable and not detrimental to the Government and is, therefore, not subject to the no increased cost prohibition provisions of CAS-covered contracts and subcontracts affected by the change. Fixed-price contracts and subcontracts means- (1) Fixed-price contracts and subcontracts described at 16.202 , 16.203 (except when price adjustments are based on actual costs of labor or material, described at 16.203-1 (a)(2)), and 16.207 ; (2) Fixed-price incentive contracts and subcontracts where the price is not adjusted based on actual costs incurred ( subpart 16.4 ); (3) Orders issued under indefinite-delivery contracts and subcontracts where final payment is not based on actual costs incurred ( subpart 16.5 ); and (4) The fixed-hourly rate portion of time-and-materials and labor-hours contracts and subcontracts ( subpart 16.6 ). Flexibly-priced contracts and subcontracts means- (1) Fixed-price contracts and subcontracts described at 16.203-1 (a)(2), 16.204 , 16.205 , and 16.206 ; (2) Cost-reimbursement contracts and subcontracts ( subpart 16.3 ); (3) Incentive contracts and subcontracts where the price may be adjusted based on actual costs incurred ( subpart 16.4 ); (4) Orders issued under indefinite-delivery contracts and subcontracts where final payment is based on actual costs incurred ( subpart 16.5 ); and (5) The materials portion of time-and-materials contracts and subcontracts ( subpart 16.6 ). Noncompliance means a failure in estimating, accumulating, or reporting costs to- (1) Comply with applicable CAS; or (2) Consistently follow disclosed or established cost accounting practices. Required change means- (1) A change in cost accounting practice that a contractor is required to make in order to comply with applicable Standards, modifications or interpretations thereto, that subsequently becomes applicable to an existing CAS-covered contract or subcontract due to the receipt of another CAS-covered contract or subcontract; or (2) A prospective change to a disclosed or established cost accounting practice when the CFAO determines that the former practice was in compliance with applicable CAS and the change is necessary for the contractor to remain in compliance. Unilateral change means a change in cost accounting practice from one compliant practice to another compliant practice that a contractor with a CAS-covered contract(s) or subcontract(s) elects to make that has not been deemed a desirable change by the CFAO and for which the Government will pay no aggregate increased costs.