Our August edition of "Government Contracts Legislative and Regulatory Update" offers a summary of the relevant changes that took place during the month of July.

Highlights this month include:

  • CAS Board clarifies commercial item exemption, but creates potential audit issues
  • FY 2019 National Defense Authorization Act becomes law

This update will also be available in Contract Management Magazine, which is published monthly by the National Contract Management Association (NCMA).


CAS Board clarifies commercial item exemption, but creates potential audit issues

After publishing a proposed rule more than five and a half years ago, the Cost Accounting Standards (CAS) Board issued a final rule on July 17, 2018 revising the CAS exemption for contracts or subcontracts for the acquisition of commercial items. The final rule clarifies that the current CAS exemption for commercial items extends to all contract types listed in Federal Acquisition Regulation (FAR) 12.207. However, in doing so, it also creates a potential audit issue arising out of the conditions levied by FAR 12.207 on certain contract types. For additional analysis regarding this rule issued by the CAS Board, please see our recently published insight.


FY 2019 National Defense Authorization Act Becomes Law

President Trump has signed the John S. McCain National Defense Authorization Act for Fiscal Year 2019, Pub. Law. No. 115-232, (NDAA) into law. One of the few remaining "must-pass" annual pieces of legislation, the NDAA cleared the U.S. House of Representatives on July 27, 2018 after the conference report reconciled differences between the versions of the NDAA passed by the House and U.S. Senate. On August 1, 2018, the Senate approved the NDAA. President Trump signed the NDAA into law on August 13, 2018. The NDAA authorizes a $717 billion national defense budget affecting numerous aspects of the U.S. military, including certain reforms to the Government's acquisition policy. Please see our recently published insight regarding the NDAAfor additional information regarding the NDAA's various provisions that may be relevant to government contractors.

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