The dollar figure that decides whether a federal contractor has to keep its books the government's way has gone from $2.5m to $35m
Nine people wrote in. That is the entire public response to a rule deciding which federal contractors have to run their cost accounting the government's way, and the Board records that all nine supported it.
The Cost Accounting Standards Board, which sits inside the Office of Federal Procurement Policy at the Office of Management and Budget, filed a final rule on Monday morning raising every monetary threshold in the programme at once. The basic applicability threshold goes from $2.5m to $35m. Full coverage and the Disclosure Statement requirement go from $50m to $100m. An agency head's authority to waive the standards without asking the Board goes from $15m to $100m. The rule takes effect 30 days after publication, which is scheduled for 1 September.
The part Congress did
The largest of those moves was not the Board's to make. OMB sent a legislative proposal to Congress in June 2025 to break the basic threshold away from the Truthful Cost or Pricing Data statute and fix it at a stated $35m, and to delete the $7.5m trigger contract, which could pull a contractor into coverage on the strength of one older award. Section 1806 of the 2026 National Defense Authorization Act codified the proposal in full. Monday's rule is the Board writing that into 48 CFR 9903.
Section 1806(d) did something quieter and worth noting. It extended three of the statutory exemptions to portions of contracts and subcontracts, which is how hybrid awards that mix contract types get handled. The Board has aligned its own text to match.
Thirty percent fewer filers, one percent fewer dollars
The Board's own arithmetic is the argument. Looking at five years of Federal Procurement Data System records covering FY2020 through FY2024, it counts 773 entities subject to full coverage and Disclosure Statement requirements, with aggregate contract values of $1.22 trillion. Apply the $100m threshold to the same data and the count falls to 564 while the dollars stay at $1.21 trillion.
That is a nearly 30 percent cut in the number of companies filing, against a loss of less than one percent of the money under supervision. On the statutory threshold the earlier estimate was starker: roughly 60 percent fewer covered business segments, with over 90 percent of covered dollars retained.
The exemption at 9903.202-1(c)(ii), which let a segment skip a Disclosure Statement if its covered awards were under 30 percent of segment sales and under $10m, is gone. So is the rest of paragraph (c). Commenters argued that aggregating at company level and then testing again at segment level was a step producing confusion rather than information. The Board agreed and rewrote (b)(2) so the test runs once, at the business unit.
Where the Board said no
Commenters wanted one rule for indefinite delivery contracts. They did not get it.
For a multiple-award IDC, applicability and every exemption are determined at the task or delivery order, using that order's ceiling. For a single-award IDC, they are determined once, when the contract is awarded, using the ceiling of the whole contract. Industry submissions called that inconsistent, inequitable and capable of pulling commercial or firm-fixed-price orders into coverage that would be exempt anywhere else, and several asked the Board to delay and gather more data.
The Board writes that it was not persuaded. Its stated reason is that a single-award contract establishes a long-term relationship without maintaining competition for the individual orders, which increases the potential for vendor lock-in, and that this is higher risk rather than lower. It did add language so an entire single-award IDC can be exempt if it only allows orders for commercial products or services, or only firm-fixed-price orders awarded on adequate price competition without certified cost or pricing data.
The scale being protected is in the document. Obligations on task and delivery orders against single-award IDCs reached $262bn in FY2024, which the Board says was over one-third of all contract obligations that year.
The transition nobody had
One comment set out the trap plainly. A contractor performing a $50m contract under full coverage, with nothing else, takes a $40m award under the new rules and stays on full coverage, because the old status carries forward under 9903.201-2(b)(2). Neither award is over $100m and together they are not either. A new entrant bidding the same work would get modified coverage.
The Board agreed the mechanism was needed and added it, with a condition: no unresolved noncompliances. A contractor that qualifies may move to modified coverage at the start of its next full cost accounting period beginning on or after the effective date, and may certify on that basis for new solicitations. Any resulting change in cost accounting practice is treated as unilateral, with the price adjustment consequences that follow.
Contract price adjustments themselves, which the 2026 NDAA also touched, are not in this rule. The Board says incorporating them would need its own notice and comment, and has opened a separate case.
