For years, buyers have used the $2.5 million threshold as an early signal that Cost Accounting Standards, commonly known as CAS, may apply to a contract or subcontract. Well, that is changing in a significant way.
On September 1, 2026, the Cost Accounting Standards Board published a final rule increasing several CAS thresholds. The rule becomes effective October 1, 2026, and is intended to reduce administrative burden, simplify CAS determinations, and make it easier for more businesses to compete for federal work.
The most notable change for buyers is the increase in the basic CAS applicability threshold from $2.5 million to $35 million. This means beginning October 1, 2026, negotiated contracts and subcontracts not exceeding $35 million will be exempt from CAS.
The final rule also makes several related changes:
- Increases the basic CAS applicability threshold from $2.5 million to $35 million.
- Increases the threshold for full CAS coverage and Disclosure Statement requirements from $50 million to $100 million.
- Eliminates the previous $7.5 million “trigger contract” concept.
- Continues the CAS exemption for contracts and subcontracts awarded to small businesses.
- Allows certain CAS exemptions to apply to individual portions of hybrid contracts or subcontracts rather than requiring the entire award to qualify for the exemption.
- Changes how CAS is evaluated for Indefinite Delivery, Indefinite Quantity/Indefinite Delivery Contract (IDIQ/IDC) awards. For multiple-award IDCs, CAS is determined at the individual task or delivery order level. For single award IDCs, CAS is determined at the IDC level using the contract ceiling.
These changes do not mean buyers can simply stop asking CAS questions. The award date, contract type, business size, pricing method, and other exemptions still matter. The higher threshold changes when CAS becomes a concern, but buyers must still document why an award is or is not subject to CAS.
What About Awards Issued Before October 1, 2026?
The effective date is important.
For awards issued on or after October 1, 2026, the new CAS thresholds established by the final rule will apply. However, existing CAS-covered awards do not automatically become CAS-exempt on October 1. The final rule includes separate transition provisions for contractors moving from full to modified CAS coverage.
For DoD awards issued before October 1, 2026, do not assume the old $2.5 million threshold automatically applies. Check the CAS clauses included in the applicable contract or subcontract clauses. DoD issued Class Deviation 2026-O0006, with Revision 1 as of July 30, to implement revised CAS-related provisions before the final rule’s effective date. The applicable revised FAR 52.230 clauses and DFARS 252.230-799x alternate clauses should be reviewed to determine whether the updated requirements were incorporated into the prime contract and flowed down to the subcontract.
This is especially important for subcontractors. The prime contract award date and applicable clauses may not always be available in the procurement system, so buyers may need to confirm that information through the prime contract, solicitation, subcontract terms, or their Contracts organization.
What Will Change in SpendLogic?
SpendLogic’s CAS setup will be updated to reflect the new $35 million threshold effective October 1, 2026.
Until then, the existing CAS setup remains in place. This helps ensure that awards are evaluated using the appropriate requirements based on their award date and applicable clauses.
Once the update takes effect, buyers should notice fewer awards triggering CAS based only on dollar value. However, the system’s questions are still only part of the determination. Buyers remain responsible for confirming the applicable contract facts and retaining support for the selected CAS exemption.
CAS and Certified Cost or Pricing Data Are Not the Same Determination
The CAS threshold change should not be confused with the recent change to the threshold for Certified Cost or Pricing Data, or CCoPD.
CAS follows a separate rule and effective date. The new basic CAS threshold is $35 million and becomes effective October 1, 2026. A purchase can therefore require a Certified Cost or Pricing Data review without being subject to CAS. Each determination must be evaluated and documented separately.
What Buyers Need to Do
For Awards on or after October 1, 2026:
- Use 35M as the CAS trigger.
- Do not assume an award over $35M is CAS-covered (also check your flowdowns).
- For IDIQs, know whether the vehicle is a single-award or multiple-award.
- Keep CAS and Certified Cost or Pricing Data separate.
Higher thresholds should simplify the process for many purchases, but the dollar value should never be the only fact considered. Before completing the CAS determination, confirm the award date, supplier size status, contract type, basis of award, applicable clauses, and whether the transaction qualifies for another exemption.
The questions may change, but the goal remains the same: make the determination based on the facts available at the time of award and leave a clear record explaining why the selected requirement or exemption applies.
For additional details, review the CAS Board’s final rule in the Federal Register and DoD Class Deviation 2026-O0006, Revision 1.
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