Cost Accounting Standards applicability is set by dollar thresholds, and one of the two main thresholds already changed — quietly, in a way most CAS guides haven't caught up to. The FY2026 National Defense Authorization Act (Pub. L. 119-60), enacted December 18, 2025, directly rewrote the basic CAS applicability threshold in 41 U.S.C. 1502(b)(1)(B) from a cross-referenced figure to a flat $35 million, effective on enactment with no delay. A second threshold — full CAS coverage, currently $50 million — is still only a proposed rule. Treating both as equally "not yet in effect" is the mistake this guide exists to prevent.

Who's Exempt From CAS Entirely

Before asking which coverage tier applies, ask whether CAS applies at all. Under 41 U.S.C. 1502(b)(1)(B) and its implementing regulation at 48 CFR 9903.201-1(b), a negotiated contract is exempt from all CAS requirements if it falls into one of several categories: sealed-bid contracts; contracts and subcontracts with small businesses; contracts with foreign governments; contracts where price is set by law or regulation; commercial-item acquisitions under FAR 12.207; firm-fixed-price contracts awarded through adequate price competition without certified cost or pricing data; and — the big one — contracts below the basic CAS-applicability dollar threshold.

That dollar threshold just moved, and the mechanics explain the confusion. Before the FY2026 NDAA, 1502(b)(1)(B) didn't set its own number — it borrowed one, by cross-reference to the Truth in Negotiations Act (TINA) threshold for defense contracts at 10 U.S.C. 3702(a)(1)(A). That's why practitioners have called this "the TINA threshold" for years, even though the two statutes are legally distinct. Section 1806(d) of the NDAA severed that link: it struck the cross-reference and inserted a standalone figure, $35 million, that no longer moves with TINA. Separately, Section 1804(c) raised the actual TINA/certified-cost-or-pricing-data threshold from $2.5 million to $10 million — but only for defense contracts entered into after June 30, 2026. The two numbers now diverge on purpose: CAS applicability sits at $35 million, TINA sits at $10 million, and mixing them up will exempt a contract too early or too late.

Full Coverage vs. Modified Coverage

If a contract isn't exempt, the next question is how much of CAS applies — and this is the threshold that hasn't changed yet. Full coverage — compliance with every standard in 48 CFR Part 9904 — currently attaches to a contractor business unit that either receives a single CAS-covered award of $50 million or more, or received $50 million or more in net CAS-covered awards during the preceding cost accounting period. Everything else that's CAS-covered but doesn't meet that bar gets modified coverage, a much shorter list: only CAS 401 (Consistency in Estimating, Accumulating, and Reporting Costs), CAS 402 (Consistency in Allocating Costs Incurred for the Same Purpose), CAS 405 (Accounting for Unallowable Costs), and CAS 406 (Cost Accounting Period). A contractor whose only CAS-covered work is modified-coverage work never has to touch the other fifteen standards.

The catch: if a business unit lands even one full-coverage contract in a given cost accounting period, every CAS-covered contract awarded to that unit during that same period converts to full coverage too. Modified coverage is a status for the whole business unit's cost accounting period, not a contract-by-contract election.

What's Actually Changed, and What's Still Just Proposed

Section 1806 of the NDAA does two structurally different things on two different timelines. Section 1806(d) directly rewrote statutory text — struck language in 41 U.S.C. 1502(b)(1)(B) and inserted "$35,000,000" in its place. That's a self-executing amendment with no stated delay, so it has been law since enactment on December 18, 2025; the current official U.S. Code text already reflects it. Section 1806(a) is different: it orders the Administrator for Federal Procurement Policy to revise the regulation at 48 CFR 9903.201-2 — not the statute — raising full CAS coverage from $50 million to $100 million within 180 days. That's a directive to regulate, not a change to the law, and it isn't self-executing. The CASB published a proposed rule on March 20, 2026 to carry it out, with comments closing April 20, 2026 — past the 180-day deadline, and as of this guide's publication, still not finalized. Until CASB issues a final rule, $50 million remains the operative full-coverage figure, and the CFR text at 9903.201-1 still shows the old $7.5 million "trigger contract" exemption test, which the same pending rulemaking is expected to eliminate.

A separate, already-final action is easy to confuse with this one: the CASB's July 8, 2026 rule rescinding CAS 408 and CAS 411 and stripping most of CAS 404 and CAS 409, effective August 7, 2026. That rule changes what the standards require once CAS applies to your contract. The threshold questions in this guide are about whether and how much of CAS applies in the first place. They're moving on independent tracks, and a contractor watching only one is missing the other half of the picture.

What It Means for Contractors

  • The CAS applicability threshold is $35 million now, not $2.5 million and not $10 million — that change is already law, regardless of what the CFR text still says. Don't use an outdated $2.5 million figure to argue a contract is CAS-covered when it may already be exempt.
  • Don't confuse the $35 million CAS threshold with the $10 million TINA/certified-cost-or-pricing-data threshold. They used to move together; they don't anymore. Check each separately.
  • The $100 million full-coverage figure is not yet in force — full coverage still kicks in at $50 million until CASB finalizes its pending rule. Don't assume relief that hasn't actually arrived.
  • If your business unit is close to the (still-current) $50 million full-coverage line, remember that one large award converts every CAS-covered contract in that accounting period to full coverage — plan proposal timing accordingly.
  • Modified coverage means four standards, not nineteen. If you've been complying with the full standard set on a contract that only requires modified coverage, you may be spending compliance effort you don't need to.

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