Christopher Kubasik — CEO of L3Harris Technologies, Inc. and Chairman of the Aerospace Industries Association — recently published an open letter to the Department of Government Efficiency (DOGE), recommending the elimination of Cost Accounting Standards (CAS) in the name of efficiency. It’s a clever attempt to position a traditional defense contractor as an ally of new thinking, but it comes with a big caveat: Eradicating these standards would only promote more Pentagon waste.
As Kubasik explains, Congress established Cost Accounting Standards to protect taxpayers from misallocated costs or unreasonable expenses in military contracts. This remains true today. CAS are a set of accounting principles used to price certain government contracts — specifically, what are known as “cost-based” contracts. These are contracts that are priced based on the actual or expected cost of performing the work. Without CAS, contractors could essentially charge the government whatever they want — regardless of actual costs incurred.
Kubasik argues that Cost Accounting Standards are duplicative because contractors are already required to comply with Generally Accepted Accounting Principles (GAAP), suggesting that they “replace” CAS. But Cost Accounting Standards serve an entirely different purpose than GAAP.
Read the full article on Breaking Defense.
