CAS Board Meeting

CAS Board – 57th Meeting
June 22, 2009

The CASB Director, Mr. Raymond Wong, acting on behalf of Chairman Lesley Field, the Acting Administrator, Office of Federal Procurement Policy (OFPP), convened the 57th meeting of the Cost Accounting Standards (CAS) Board (CASB) on June 22, 2009 at 1:00 P.M.  The meeting was held in the Eisenhower Executive Office Building, 1650 Pennsylvania Avenue, Washington, DC.  Ms. Field was unable to attend the meeting.  Prior to the meeting, she approved and discussed the meeting agenda with Mr. Wong.  Subsequent to the meeting, Mr. Wong briefed her on the discussions that transpired during the meeting and the actions taken by the CASB Members.  Ms. Field concurred with the actions taken by the CASB Members during the meeting.  CASB Members Mses. April Stephenson and Kathleen Turco, as well as Messrs. Bruce Timman and Richard Wall, were present.  Also in attendance were Messrs. Eric Shipley and Lawrence Rabyne, CASB Staff.

Agenda Items:

CAS Pension Harmonization

Mr. Eric Shipley briefed the CASB on the draft Notice of Proposed Rulemaking (NPRM) prepared at the CASB’s direction.  At the last CASB meeting, the CASB had directed the Staff to finalize the ANPRM II.  Subsequent to that meeting, the CASB determined that it would be more prudent to publish a NPRM rather than a second ANPRM (i.e., ANPRM II) at this time.  Accordingly, the Staff prepared the draft NPRM based on the conceptual approach approved previously by the CASB for ANPRM II.  Mr. Shipley also briefed the CASB on the projected cost impact of CAS pension costs under various scenarios for CAS pension harmonization assuming the draft proposed rule in the draft NPRM as requested by the CASB at its last meeting. 

After some discussion, the CASB approved the NPRM for publication.  The CASB discussed various features of the NPRM.  The CASB directed the Staff to review the NPRM for internal consistency and prepare the NPRM for publication in the Federal Register for comments.  The NPRM will go through a clearance process before it is published in the Federal Register.

A CASB meeting will be scheduled to discuss the public comments to the NPRM when the Staff has summarized and reviewed them, and formulated recommendations to address them

The CAS Overseas Exemption for Contracts Executed and Performed Entirely Outside of the United States (48 CFR 9903.201-1(b)(14))

Mr. Wong briefed the CASB on the comments received in response to the Notice of Request for Information (74 FR 18491, April 23, 2009) on the (b)(14) overseas exemption and the letters sent to the agencies requesting the same information.  Seven public comments from several industry groups, a public interest group, a consultant, and some agencies were received, as well as comments from the three agencies contacted directly by the CASB.  The comments expressed views that spanned the spectrum.  The comments were summarized and grouped by the questions posed by the CASB in its Notice of Request for Information and by common themes when the comments were not responsive to the questions posed.  Mr. Wong briefed the CASB on the review completed by the Staff on the applicability of CAS to contracts and subcontracts which would otherwise be subject to CAS, but for the (b)(14) overseas exemption, as well as the Staff’s determination on whether the Government would benefit from the application of CAS to such contracts and subcontracts.  Mr. Wong also briefed the CASB on the Staff’s recommended disposition of the comments and on the draft Notice of Proposed Rule with the Staff’s recommendations on what should be done with the (b)(14) overseas exemption.

The CASB discussed the case, including the comments and the proposed responses to them; the Staff’s review of the applicability of CAS to contracts and subcontracts which would be subject to CAS, but for the (b)(14) overseas exemption; whether the Government would benefit from the application of CAS to such contracts and subcontracts that are currently exempted from CAS by the (b)(14) overseas exemption; and the draft Notice of Proposed Rule.  The CASB reviewed the various arguments supporting retention of the (b)(14) overseas exemption, as well of those arguments advocating for its elimination.  The CASB approved the general content and direction of the Notice of Proposed Rule on the (b)(14) overseas exemption, and directed the Staff to finalize it so it can be used to respond to the section 823 requirement (of the National Defense Authorization Act for Fiscal Year 2009) to report to Congress any proposed action or non-action by the CASB on the (b)(14)overseas exemption.  The Staff will finalize the Notice of Proposed Rule and submit it to the CASB for final approval before it is submitted as part of the CASB’s response to Congress.

Adjournment

The CASB Director, Mr. Wong, adjourned the meeting at 4:00 P.M.

Minutes submitted by Raymond J. M. Wong, July 15, 2009.