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Project on Government Oversight

POGO Letter to Rudolph Schuhbauer, CAS Board Regarding Proposed "Review" of CAS and its Role in the Government Contracting Process

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September 25, 2000

Rudolph J. Schuhbauer
Project Director
Cost Accounting Standards Board
725 17th Street, NW
Room 9013
Washington, DC 20503

ATTN: CASB Docket No. 00-02

Dear Mr. Schuhbauer:

Thank you for the opportunity to comment on the Cost Accounting Standards (CAS) Board's proposed "review: of CAS and its role in the government contracting process. POGO is a nonprofit, nonpartisan organization that has, for almost 20 years, investigated, exposed and worked to remedy abuses of power, mismanagement, and subservience to special interests, by the Federal government.

POGO strongly opposes such a "review." We believe it is another blatant attempt by government contractors, and some in the Department of Defense, to eliminate the Board's standards, rules and disclosure requirements. We urge the CAS Board to assert itself and reject the continuing and coordinated DOD-industry assault on its standards.

The call for a "review" by a so-called government-industry panel is not a good-faith attempt to stimulate meaningful discussion. It is instead the latest attack on CAS and the CAS Board under the guise of "acquisition reform."

As you know, Industry participants have urged a perilous "start from scratch" approach to CAS streamlining. One official with Lockheed Martin Corp. said contractors want a reduction in the coverage and scope of CAS requirements. Industry proposals have ranged from eliminating CAS coverage for firm fixed price contracts to creating a CAS exemption for commercial contractors who do less than 10 percent of their business with the government.

These proposals, along with other evidence contained in DOD's web site maintained by the Director of Defense Procurement, make it very obvious that plans are in the works for yet another assault and co-option of the CAS Board's regulations, jurisdiction and prerogatives. It now appears that what the "CAS Board Review Panel" failed to do, DOD (in cooperation with industry) plans to finish. We find it particularly ironic that while DOD urges the CAS Board to review its standards, DOD apparently has no systematic plan to "review" its own set of accounting principals as embodied in the Federal Acquisition Regulation contract cost principals.

Since we do not believe that DOD or the government contracting industry can be relied upon to act in good faith, we recommend that any work involving CAS be done by the Board, with the assistance of a dedicated staff that answers only to the Board.

Meanwhile, POGO will do all it can to bring the importance of the CAS Board's work to the attention of policy-makers, the media and the general public. We know that the CAS Board is facing a difficult and often thankless task. As such, we urge the Board not to forget that it must place the public's interests ahead of the special interests represented by DOD and the government contracting industry.

Sincerely,

Danielle Brian
Executive Director


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