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DCMA Revises Cyber Supply Chain Review: Updated Guidebook Modifies Audit Standards

Client Alert | 1 min read | 07.16.19

As anticipated, the Defense Contract Management Agency (DCMA) revised its Contractor Purchasing System Review (CPSR) Guidebook as of June 14, 2019, with the most significant updates to Appendix 24, Supply Chain Management Process, to further address supply chain compliance with DFARS 252.204-7012. As we previously noted, the CPSR Guidebook was revised earlier this year to address DoD guidance related to management and oversight of the supply chain in connection with DFARS 252.204-7012.

While much of the CPSR review criteria remain the same, noteworthy revisions include:

  • Asking contractors to “show how they have determined” that their subcontractors have an adequate information system that can handle Covered Defense Information, versus the prior guidance to ask contractors to “validate” the adequacy of subcontractor systems.
  • Broadening supply chain requirements by applying the Guidebook’s language to “subcontractors,” rather than just “first tier suppliers” as in the prior version.
  • Clarifying that the CPSR review is focused only on the protection of “Covered Defense Information” and not “Controlled Unclassified Information” more broadly.

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Client Alert | 1 min read | 07.08.26

CAS Board Publishes Final Rule Rescinding CAS 404, 408, 409, and 4117

As part of its ongoing effort to conform the Cost Accounting Standards (“CAS”) to generally accepted accounting principles (“GAAP”), the CAS Board published a final rule rescinding CAS 408 (Accounting for costs of compensated personal absence) and CAS 411 (Accounting for acquisition costs of material).  The CAS Board also rescinded CAS 404 (Capitalization of tangible assets) and CAS 409 (Depreciation of tangible capital assets) but retained certain requirements of CAS 404 and 409, which will be located in new paragraphs of CAS 405 (Accounting for unallowable costs).  Specifically, the CAS Board retained the requirements currently located at CAS 404-50(d)(1), CAS 409-50(e)(5), CAS 409-50(j)(1), and CAS 409-50(j)(4), which the CAS Board explained are necessary to protect the Government’s interests.  Otherwise, the CAS Board determined that the requirements of CAS 404, 408, 409, and 411 overlapped with GAAP such that GAAP “may be applied reasonably as a substitute for CAS to support contract cost and pricing.”...

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