Proposed FAR Rule Would Require More Detailed Cost Reporting

On August 5, the FAR Council published a proposed rule that would impose uniform cost-reporting requirements for line items and sub-line items in government contracts, beginning in Fiscal Year 2016, to improve the accuracy, traceability, and usability of procurement data. 79 Fed. Reg. 45,408. The proposed rule would create a new section of the FAR, FAR 4.10, describing the circumstances when line item reporting is required and the necessary level of detail in line items.

The proposed rule is based on reporting requirements already included in DOD contracts (see Defense Federal Acquisition Regulation Supplement ("DFARS") Subpart 204.71) so contractors doing substantial business with the DOD should be able to comply with the rule simply by applying the procedures used on DOD contracts to all government business. Contractors doing little to no business with DOD, however, should review their cost-accounting procedures to ensure that they can cost-effectively produce the