The upcoming June 2026 wave of Federal Acquisition Regulation amendments is expected to include significant increases to the Truth in Negotiations Act cost or pricing data threshold and to the Cost Accounting Standards applicability thresholds, according to regulatory officials and industry sources tracking the Federal Acquisition Regulation update calendar. If finalized as currently anticipated, the changes would represent the most contractor-favorable threshold adjustments to the TINA and CAS compliance framework in years, reducing administrative and legal compliance burdens for mid-sized contractors that have long argued they are subject to regulatory requirements designed for major defense prime contractors but applied to companies far smaller than the programs those requirements were intended to govern.
TINA — the Truth in Negotiations Act, codified at 10 U.S.C. 3702 for defense contracts and at 41 U.S.C. 3502 for civilian agency contracts — requires contractors to submit certified cost or pricing data when negotiating sole-source or non-competitive contract awards and modifications above specified dollar thresholds. The certification requirement carries significant legal weight: the contractor's authorized representative must affirmatively certify that the submitted cost and pricing data is accurate, complete, and current as of the date of agreement on price. If the government later discovers, through audit or other means, that the contractor possessed data that was relevant to the negotiations and failed to disclose it, the government can seek a reduction in the contract price for defective pricing — potentially recovering millions of dollars on large contracts and triggering False Claims Act liability if the deficiency is found to be knowing rather than inadvertent.
The current TINA threshold stands at $2 million, unchanged for several years despite inflation that has substantially eroded the real value of that threshold since it was last adjusted by statute. The anticipated FAR amendment would raise the threshold to $3 million, reflecting accumulated inflation and aligning the trigger more closely with the scale of procurement for which the certified disclosure process was originally designed. The change recognizes a bipartisan consensus that applying the full TINA apparatus — including the audit rights, defective pricing remedies, and record-keeping burdens it entails — to sole-source contracts that were never the primary target of the statute generates disproportionate compliance costs for smaller contractors and procurement delays that slow down the government's ability to acquire needed goods and services efficiently.
Contract Scope and Background
The Cost Accounting Standards represent a separate but interrelated compliance framework with its own applicability thresholds. CAS consists of nineteen standards that govern how defense contractors must allocate and account for costs on government contracts, covering areas as varied as the treatment of depreciation and amortization, pension cost measurement and allocation, home office expense allocation, and the consistency requirements that prevent contractors from using different accounting practices on different contracts to shift costs toward government work. Full CAS coverage — which subjects contractors to all nineteen standards and their associated disclosure statement, cost impact calculation, and contract adjustment obligations — currently applies to companies that received net CAS-covered awards of $50 million or more in the preceding cost accounting period. Modified CAS coverage, triggering only four of the nineteen standards, applies to individual contracts and subcontracts valued above $2 million.
The June 2026 FAR package is expected to raise the full CAS coverage threshold to $75 million and the modified coverage threshold to $3 million, matching the anticipated TINA adjustment and maintaining the internal consistency between the two frameworks that Congress and the FAR Council have historically sought to preserve. For companies hovering near the current $50 million full coverage threshold — a class of mid-tier contractors that has grown substantially as defense spending has increased over the past decade — this change could eliminate the need for the compliance infrastructure that full CAS coverage requires: dedicated cost accounting staff, a formally submitted CAS Disclosure Statement reviewed by the administrative contracting officer and audited by the Defense Contract Audit Agency, and annual cost impact calculations for any accounting practice changes. The annual compliance savings from transitioning out of full CAS coverage into modified coverage can reach several hundred thousand dollars for a mid-sized contractor, representing a meaningful improvement in competitive cost position on future procurements.
The FAR Council has been signaling these specific threshold adjustments through the Unified Regulatory Agenda maintained by the Office of Information and Regulatory Affairs, which catalogs active and upcoming rulemaking across the federal government. The June 2026 wave is part of a broader regulatory modernization package that also addresses the micro-purchase threshold, the simplified acquisition threshold, and a range of other dollar-denominated triggers in the FAR and DFARS that have accumulated significant inflation erosion since their last statutory adjustments. Threshold adjustments of this type historically generate bipartisan support in Congress and from both agency acquisition executives and industry, making them among the most reliably enacted regulatory changes in the federal procurement system.
What It Means for Contractors
For mid-sized contractors currently subject to full CAS coverage because their net CAS-covered awards regularly exceed the $50 million threshold, the anticipated increase to $75 million creates a genuine financial and strategic planning question worth addressing now, before the amendment is finalized. Companies whose annual covered award volumes fluctuate in the range between $50 million and $75 million should model the compliance cost savings from transitioning to modified coverage and factor those savings into their forward pricing rates and overhead projections. The transition requires updating the CAS Disclosure Statement, notifying the administrative contracting officer, and working through any cost impacts from accounting practice changes triggered by the transition — but the long-term savings in audit cost, compliance staff time, and administrative overhead typically justify the transition costs within a single fiscal year of operation under the new threshold.
For companies currently operating below the TINA threshold but growing toward it, the anticipated increase to $3 million provides additional runway before the certified cost or pricing data obligation applies. Companies in that growth corridor should use the time productively, building the internal cost accounting infrastructure — job cost accounting systems, indirect cost allocation methodologies, estimating system procedures — needed for eventual TINA compliance rather than waiting until the first covered contract arrives with a short negotiation timeline. Understanding what an adequate price proposal looks like from the government's perspective, how to structure cost or pricing data submissions that satisfy the FAR 15.408 Table 15-2 requirements, and how defective pricing exposure is calculated and managed are all disciplines that can be learned methodically during the runway period — rather than urgently under pressure of a sole-source negotiation that cannot proceed without an adequate TINA submission.
