What Happened
Department Of War Overhauls Acquisition Cost Accounting And Pricing
The US Department of War has issued a memorandum titled ‘Fostering One Strong Industrial Base’ that directs a broad set of reforms to DOW policies and practices governing defense acquisition cost accounting, pricing, auditing, and contractor oversight. The memo aims to reduce government-unique accounting burdens on commercial companies and move away from Cost Accounting Standards (CAS) towards Generally Accepted Accounting Principles (GAAP)-based accounting. The reforms are intended to promote efficiency, accountability, and performance in federal contracting, as outlined in Executive Order 14402. The memo’s implementation timeline is aggressive, with several key actions to be taken within the next 30 to 90 days. This development was reported by an unknown source.