FAR 42.603—Responsibilities.
Plain-English Summary
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.
Key Rules
Corporate-wide administration
The CACO performs designated contract administration functions on a corporate-wide basis as assigned by the responsible agency. This means the CACO is the central point for issues that affect the contractor’s organization as a whole, not just one contract or one office.
Typical CACO functions
Typical functions include determining final indirect cost rates for cost-reimbursement contracts, establishing advance agreements or recommending how corporate or home office expenses should be allocated, and administering CAS requirements that apply to corporate-level or corporate-directed accounting practices.
Use audit agency support
The CACO must fully use the responsible contract audit agency’s financial and advisory accounting services. That includes obtaining advice on whether corporate-wide policies are acceptable and using advisory audit reports to support administration decisions.
Keep others informed
The CACO must keep cognizant ACOs and auditors informed of important matters under consideration and determinations made. This ensures other officials who may be affected by the decision are aware of developments in time to coordinate their actions.
Seek advice and participation
The CACO must solicit the advice and participation of cognizant ACOs and auditors as appropriate. The rule is not just to notify others after the fact, but to involve them when their input can improve the decision or reduce inconsistency.
Responsibilities
CACO
Perform designated corporate-wide contract administration functions for the contractor, including final indirect cost rate determinations, advance agreements or recommendations on expense allocations, and CAS administration for corporate-level practices.
CACO
Use the responsible contract audit agency’s financial and advisory accounting services to the fullest extent, including obtaining advice on corporate-wide policy acceptability and reviewing advisory audit reports.
CACO
Keep cognizant ACOs and auditors informed of significant matters under consideration and the determinations made, and seek their advice and participation when appropriate.
Responsible agency
Designate the corporate-wide contract administration functions to be performed by the CACO and rely on the CACO for centralized administration of those assigned matters.
Responsible contract audit agency
Provide financial and advisory accounting services, including advice on corporate-wide policy acceptability and advisory audit reports, to support the CACO’s administration.
Cognizant ACOs and auditors
Provide advice and participation when consulted, and stay informed about important corporate-wide matters and determinations that may affect their contracts or audits.
Practical Implications
This section centralizes major accounting and administration decisions, so contractors should expect one office to drive corporate-wide indirect rate and CAS issues rather than multiple local offices making separate calls.
A common pitfall is failing to coordinate across offices; if the CACO does not keep cognizant ACOs and auditors informed, inconsistent positions can develop on indirect rates, expense allocations, or CAS treatment.
Contractors should be prepared for broader scrutiny of home office and corporate policies because those policies may be reviewed for acceptability and supported by advisory audit input.
For cost-reimbursement contractors, final indirect cost rate negotiations can have significant financial impact, so timely, accurate accounting data and clear allocation practices are critical.
The section emphasizes collaboration, not just authority: the CACO should involve audit and cognizant contract personnel early to reduce disputes, delays, and rework.
Official Regulatory Text
(a) The CACO shall perform, on a corporate-wide basis, the contract administration functions as designated by the responsible agency. Typical CACO functions include- (1) The determination of final indirect cost rates for cost-reimbursement contracts; (2) Establishment of advance agreements or recommendations on corporate/ home office expense allocations; and (3) Administration of Cost Accounting Standards (CAS) applicable to corporate-level and corporate-directed accounting practices. (b) The CACO shall- (1) Fully utilize the responsible contract audit agency financial and advisory accounting services, including- (i) Advice regarding the acceptability of corporate-wide policies; and (ii) Advisory audit reports; (2) Keep cognizant ACO’s and auditors informed of important matters under consideration and determinations made; and (3) Solicit their advice and participation as appropriate.