CAS - Valuing Basic Ordering Agreements and Contract Modifications

Basic Agreements and Basic Ordering Agreements

Basic agreements and basic ordering agreements (BOAs) are not considered contracts (FAR 16.702(a) and 16-703(a)). Since orders must be considered individually in determining CAS applicability, only orders that exceed the threshold will be CAS-covered (see CAS Working Group Paper 76-2).

WG 76-2 - Application of CAS to Contract Modifications and to Orders Placed Under Basic Agreements.

The guidance states that "With respect to contract modifications the general rule is that any modifications made to a contract pursuant to the terms and conditions of the contract will not affect the status of the contract with respect to CAS application. That is, if CAS was applicable to the original contract, it will be applicable to the modification, if CAS was not applicable to the original contract, it will not apply to the modification."

In the case of Basic Agreements, FAR 3-410 specifically states that they are not contracts. The individual contracts or orders are therefore to be individually considered when determining the applicability of CAS. If the CAS dollar threshold is reached and the negotiated contract or order is not otherwise exempt under the CAS rules and Regulations, the contract or order is subject to CAS.