HKA Government Contracting Regulatory Update
6th November 2026
Fall 2026
HKA’s Government Contracting Regulatory Update highlights regulatory changes, audit guidance, industry trends, and other news relevant to US government contracting. This regulatory update focuses on recent changes to the Cost Accounting Standards (CAS), proposed language in the fiscal year (FY) 2027 National Defense Authorization Act (NDAA), the Revolutionary Federal Acquisition Regulation (FAR) Overhaul, recent Department of War (DoW) cost and pricing memos and the peer review process for contractor facilitization costs, as well as other relevant cost and pricing updates.
Summary of services
Government contractors operate in one of the most complex and closely scrutinized regulatory environments. HKA brings deep and broad expertise to help clients navigate this landscape with confidence – ensuring compliance, mitigating risk, and resolving disputes efficiently.
Our expert team includes industry-leading specialists in federal procurement regulations, disputes, grant and agreement regulations, business systems, and cost accounting, supported by a world-class bench of experts in forensic accounting, investigations, economic damages, and technical disciplines. This multidisciplinary strength allows us to deliver tailored, cost-effective solutions across the full lifecycle of government contracting.
FY 2027 NDAA Draft Bills
By Tom Reynolds, Partner, and Kwe Parker, Associate Director
On June 15, 2026, an amended draft of the fiscal year (FY) 2027 NDAA was released by the House of Representatives
CAS Board Final Rule – Conformance of CAS to GAAP for CAS 404, 408, 409, and 411
By Tom Reynolds, Partner, and Kwe Parker, Associate Director
On September 11, 2025, the CAS Board released a Notice of Proposed Rulemaking (NPRM) to partially or wholly eliminate CAS 404, 408, 409, and 411 to conform CAS to Generally Accepted Accounting Principles (GAAP).
CAS Board Final Rule – Conformance of CAS 407 to GAAP
By Tom Reynolds, Partner, and Kwe Parker, Associate Director
On March 20, 2026, the CAS Board published an NPRM to partially eliminate CAS 407 (Use of standard costs for direct material and direct labor) because significant overlap exists between CAS 407 and GAAP
CAS Board Final Rule – Increase of Monetary Thresholds and Other Matters Related to CAS Program Requirements
By Tom Reynolds, Partner, and Kwe Parker, Associate Director
On September 1, 2026, the CAS Board issued a final rule on monetary thresholds and other matters concerning CAS applicability.
Revolutionary FAR Overhaul Updates
By Tom Reynolds, Partner, and Kwe Parker, Associate Director
On June 23, 2026, the FAR Council proposed to amend the FAR to implement Executive Order 14275, Restoring Common Sense to Federal Procurement, and issued four proposed rules to streamline FAR Parts 1, 2, 3, 4, 5, 6, 7, 10, 18, 24, 26, 29, 33, 37, 39, 40, 41, 49, 52, and 53.
DoW Memorandum – Noncompetitive (Sole Source) Peer Review Process for Contractor Facilitization Costs
By Tom Reynolds, Partner, and Kwe Parker, Associate Director
Consistent with Executive Order 14372, Prioritizing the Warfighter in Defense Contracting, the DoW released a memorandum dated August 10, 2026 that expands the review of contractor facilitization costs on sole source acquisitions.
DoW Memorandum – Supplier Cost and Pricing Transparency
By Tom Reynolds, Partner, and Kwe Parker, Associate Director
On August 18, 2026, the DoW published a memo focused on maximizing insight into contractor cost and pricing data.
DoW Memorandum – Fostering One Strong Industrial Base
By Tom Reynolds, Partner, and Kwe Parker, Associate Director
On September 14, 2026, the DoW published a memo outlining efforts to strengthen the Defense Industrial Base.
Audit Alert on the Increase to Truthful Cost or Pricing Data Threshold and TINA Lite Authority
By Tom Reynolds, Partner, and Kwe Parker, Associate Director
On August 27, 2026, DCAA published an MRD on the increase to the Truthful Cost or Pricing Data Threshold and Truthful Cost or Pricing Data Act (TINA) Lite Authority.
DoW – Letter to the Defense Industrial Base and Acquisition Stakeholders
By Tom Reynolds, Partner, and Kwe Parker, Associate Director
On July 31, 2026, the DoW published a letter to the Defense Industrial Base and Acquisition Stakeholders suggesting the implementation of common-sense contract accounting changes.
Authors
HKA’s Government Contracting Group
HKA’s Government Contracting experts understand the complex business and regulatory environments in which government contractors operate and have a history of finding practical, cost-effective solutions to challenges faced by government contractors and their counsel.
