BLUF: The Office of Management and Budget's Cost Accounting Standards Board finalized a rule raising the threshold for full Cost Accounting Standards (CAS) coverage and Disclosure Statement requirements from $50 million to $100 million, effective October 1, 2026.

The Board proposed the change in a March 20, 2026 Notice of Proposed Rulemaking (91 FR 13559) and received nine sets of public comments — five from industry associations, two from individual contractors, one from a consulting firm, and one from an individual — all of which supported the deregulatory changes. The final rule also eliminates a now-redundant exemption at CAS 9903.202-1(c)(ii), which had exempted a business segment from Disclosure Statement requirements if its CAS-covered awards fell below 30 percent of segment sales and under $10 million; the Board found this exemption unnecessary once the general threshold doubled.

Why it matters: Doubling the full-coverage threshold removes a substantial number of mid-size contracts and contractors from full CAS coverage and Disclosure Statement filing obligations, directly cutting compliance costs and lowering the barrier to entry for nontraditional and mid-size contractors who previously had to build full CAS-compliant accounting systems. The rule also adds a mechanism allowing contractors currently under full coverage — but who would fall under the new $100 million threshold — to qualify for modified coverage on new awards, provided they have no unresolved CAS noncompliances.

By the numbers:

• New full-coverage/Disclosure Statement threshold: $100 million (up from $50 million)
• Eliminated segment-level exemption threshold: previously less than 30% of segment sales and under $10 million
• Effective date: October 1, 2026
• NPRM comment period: nine comment sets received, all supportive
• RIN: 0348-AB85

The rule also clarifies that a Disclosure Statement is required only for segments or business units that independently meet the applicable full-coverage threshold, removing an aggregation step that commenters said caused confusion for companies with multiple CAS-reporting segments.

Source: Federal Register