FAR and DFARS › FAR Part 30: Cost Accounting Standards Administration › Subpart 30.6

FAR 30.602 Materiality.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This section tells the Contracting/Financial Administration Officer (CFAO) how to decide whether a cost impact is 'material' under the Cost Accounting Standards. If the CFAO decides the impact is immaterial, no contract adjustments are made and the cost impact process ends, but the contractor may still be told to fix any noncompliance. If the impact is material, the CFAO must follow the other FAR provisions on cost impact.

Applies to: The CFAO (contracting/financial administration officer) making materiality determinations for CAS cost impacts

What it requires

Use the criteria in 48 CFR 9903.305 to determine materiality
Base a materiality determination on adequate documentation
When the cost impact is immaterial, make no contract adjustments and conclude the cost impact process
When the cost impact is immaterial, document the rationale for the determination

Key terms: materiality · CFAO · general dollar magnitude proposal · cost impact · noncompliance

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

(a) In determining materiality, the CFAO shall use the criteria in 48 CFR 9903.305.

(b) A CFAO determination of materiality—

(1) May be made before or after a general dollar magnitude proposal has been submitted, depending on the particular facts and circumstances; and

(2) Shall be based on adequate documentation.

(1) Make no contract adjustments and conclude the cost impact process;

(2) Document the rationale for the determination; and

(3) In the case of noncompliance issues, inform the contractor that—

(i) The noncompliance should be corrected; and

(ii) If the noncompliance is not corrected, the Government reserves the right to make appropriate contract adjustments should the cost impact become material in the future.

(d) For required, unilateral, and desirable changes, and CAS noncompliances, when the amount involved is material, the CFAO shall follow the applicable provisions in 30.603, 30.604, 30.605, and 30.606.

Sections it refers to

30.603 Changes to disclosed or established cost accounting practices.
30.604 Processing changes to disclosed or established cost accounting practices.
30.605 Processing noncompliances.
30.606 Resolving cost impacts.

← 30.601 Responsibility. · 30.603 Changes to disclosed or established cost accounting practices. →

Rule changes for FAR Part 30

Federal Acquisition Regulation: Inflation Adjustment of Acquisition-Related Thresholds ↗ · final rule 2025-08-27 · effective 2025-10-01
Federal Acquisition Regulation: Inflation Adjustment of Acquisition-Related Thresholds ↗ · proposed 2024-11-29 · comments due 2025-01-28

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.