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New CAS Thresholds Ease Defense Contracting Barriers

October 4, 2026

2 min read

Key Takeaways

New CAS thresholds exempt contracts under $35 million.
Higher full-coverage threshold set at $100 million.
Revised rules aim to increase acquisition speed and competition.
Changes may reduce CAS-covered business segments by 60%.

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Strategic Implications

The revised CAS thresholds may indicate a shift towards greater reliance on commercial accounting standards, which could attract more non-traditional suppliers to defense contracting and strengthen competition in the industry. This move suggests a focus on reducing barriers and increasing acquisition speed, which may benefit middle-market companies and manufacturers.

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What Happened

Revised Accounting Standards Open Doors For Commercial Suppliers

The Department of Defense has implemented new Cost Accounting Standards (CAS) thresholds, which may reduce barriers for defense contractors. The revised rules exempt contracts under $35 million and set a higher full-coverage threshold at $100 million. This change aims to increase acquisition speed, attract more commercial companies, and strengthen competition across the US defense industrial base. According to UHY, the revised thresholds may reduce the number of CAS-covered business segments by approximately 60%, making defense contracting more accessible to non-traditional suppliers. This development was first reported by Unknown Source.

Source | Originally Published: October 2, 2026

Companies Mentioned