FAC Number: 2023-01
Effective Date: 01/31/2023

Subpart 42.6 - Corporate Administrative Contracting Officer

Subpart 42.6 - Corporate Administrative Contracting Officer

42.601 General.

Contractors with more than one operational location (e.g., division, plant, or subsidiary) often have corporate-wide policies, procedures, and activities requiring Government review and approval and affecting the work of more than one administrative contracting officer (ACO). In these circumstances, effective and consistent contract administration may require the assignment of a corporate administrative contracting officer (CACO) to deal with corporate management and to perform selected contract administration functions on a corporate-wide basis.

42.602 Assignment and location.

      (a) A CACO may be assigned only when (1) the contractor has at least two locations with resident ACO’s or (2) the need for a CACO is approved by the agency head or designee (for this purpose, a nonresident ACO will be considered as resident if at least 75 percent of the ACO’s effort is devoted to a single contractor). One of the resident ACO’s may be designated to perform the CACO functions, or a full-time CACO may be assigned. In determining the location of the CACO, the responsible agency shall take into account such factors as the location(s) of the corporate records, corporate office, major plant, cognizant government auditor, and overall cost effectiveness.

      (b) A decision to initiate or discontinue a CACO assignment should be based on such factors as the-

           (1) Benefits of coordination and liaison at the corporate level;

           (2) Volume of Government sales;

           (3) Degree of control exercised by the contractor’s corporate office over Government-oriented lower-tier operating elements; and

           (4) Impact of corporate policies and procedures on those elements.

      (c) Responsibility for assigning a CACO shall be determined as follows:

           (1) When all locations of a corporate entity are under the contract administration cognizance of a single agency, that agency is responsible.

           (2) When the locations are under the contract administration cognizance of more than one agency, the agencies concerned shall agree on the responsible agency (normally on the basis of the agency with the largest dollar balance, including options, of affected contracts). In such cases, agencies may also consider geographic location.

      (d) The directory of contract administration services components referenced in 42.203 includes a listing of CACO’s and the contractors for which they are assigned responsibility.

42.603 Responsibilities.

      (a) The CACO shall perform, on a corporate-wide basis, the contract administration functions as designated by the responsible agency. Typical CACO functions include-

           (1) The determination of final indirect cost rates for cost-reimbursement contracts;

           (2) Establishment of advance agreements or recommendations on corporate/ home office expense allocations; and

           (3) Administration of Cost Accounting Standards (CAS) applicable to corporate-level and corporate-directed accounting practices.

      (b) The CACO shall-

           (1) Fully utilize the responsible contract audit agency financial and advisory accounting services, including-

                (i) Advice regarding the acceptability of corporate-wide policies; and

                (ii) Advisory audit reports;

           (2) Keep cognizant ACO’s and auditors informed of important matters under consideration and determinations made; and

           (3) Solicit their advice and participation as appropriate.

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