FAR 42.6—Subpart 42.6
Contents
- 42.601
General.
FAR 42.601 explains when the Government may need to use a corporate administrative contracting officer, or CACO, instead of relying only on individual administrative contracting officers (ACOs) at separate contract locations. The section focuses on contractors that operate through more than one location, such as divisions, plants, or subsidiaries, and whose corporate-wide policies, procedures, or activities require Government review and approval. It recognizes that some contractor decisions affect multiple contracts and multiple ACOs, so contract administration can become inconsistent or inefficient if handled only at the local level. The purpose of the section is to support effective, coordinated, and consistent administration across the contractor’s organization by allowing one ACO to handle selected corporate-wide matters. In practice, this means the Government may centralize certain oversight and approval functions when contractor practices have enterprise-wide impact, while still leaving day-to-day administration with the appropriate local ACOs where appropriate.
- 42.602
Assignment and location.
FAR 42.602 explains when a Corporate Administrative Contracting Officer (CACO) may be assigned, where that CACO should be located, how agencies decide whether to start or stop a CACO assignment, who is responsible for making the assignment when a contractor has multiple locations, and where to find the official directory listing CACOs and their assigned contractors. In practice, this section is about centralizing contract administration at the corporate level when that improves coordination, oversight, and efficiency across multiple contracts and locations. It sets threshold conditions for using a CACO, including the requirement for at least two locations with resident ACOs unless higher-level approval is obtained, and it treats certain nonresident ACOs as resident for this purpose if they devote at least 75 percent of their effort to one contractor. It also tells agencies to consider practical factors such as corporate records, corporate office, major plant, cognizant government auditor, and overall cost effectiveness when choosing the CACO’s location. Finally, it allocates responsibility among agencies and points users to the contract administration services directory for the official listing of CACO assignments.
- 42.603
Responsibilities.
FAR 42.603 explains the role and duties of the Corporate Administrative Contracting Officer (CACO) when contract administration must be handled on a corporate-wide basis rather than by a single contract office. It covers three major subject areas: the CACO’s authority to perform designated corporate-level administration functions, typical CACO functions such as determining final indirect cost rates for cost-reimbursement contracts, establishing advance agreements or making recommendations on corporate or home office expense allocations, and administering Cost Accounting Standards (CAS) that apply to corporate-level and corporate-directed accounting practices. It also addresses how the CACO must work with the responsible contract audit agency by using its financial and advisory accounting services, including advice on the acceptability of corporate-wide policies and advisory audit reports. Finally, it requires the CACO to keep cognizant ACOs and auditors informed of important matters and determinations, and to seek their advice and participation as appropriate. In practice, this section is about coordination, consistency, and informed oversight for contractor-wide accounting and administration issues that affect multiple contracts and agencies.