41 U.S.C. § 1501 (PUBLIC CONTRACTS)
§ 1501. Cost Accounting Standards Board
(a) Organization.—
The Cost Accounting Standards Board is an independent board in the Office of Management and Budget.
(b) Membership.—
(1) Members, chairman, and appointment.—
The Board shall consist of 5 voting members and 2 nonvoting members.
(A) Voting members.—
One voting member is the Administrator of Federal Procurement Policy, who serves as Chairman. The other 4 members, all of whom shall have experience in Federal Government contract cost accounting, are as follows:
(i) 2 representatives of the Federal Government, each of whom has substantial experience in administering and managing covered contracts—
(I) one of whom is a representative of the Department of Defense appointed by the Secretary of Defense; and
(II) one of whom is an officer or employee of the General Services Administration appointed by the Administrator of General Services.
(ii) 2 individuals from the private sector, each of whom is appointed by the Director of the Office of Management and Budget—
(I) one of whom is a senior employee or retired senior employee of a Government contractor with substantial experience in the private sector involving administration and management of covered contracts; and
(II) one member of the accounting profession, with substantial experience as an accountant.
(B) Nonvoting members.—
There may be up to 2 nonvoting members appointed by the Board from academia, a nonprofit organization, or a private entity with substantial experience in establishing financial accounting and reporting standards in compliance with Generally Accepted Accounting Principles.
(2) Term of office.—
(A) Length of term.—
The term of office of each member, other than the Administrator, is 4 years, which may be extended for an additional 4-year period by the individual who appointed such member under paragraph (1). The terms are staggered, with the terms of 2 members expiring in the same year, the term of another member expiring the next year, and the term of the last member expiring the year after that.
(B) Individual required to remain with appointing agency.—
A member appointed under paragraph (1)(A)(i) may not continue to serve after ceasing to be an officer or employee of the agency from which that member was appointed.
(3) Vacancy.—
A vacancy on the Board shall be filled in the same manner in which the original appointment was made. A member appointed to fill a vacancy serves for the remainder of the term for which that member’s predecessor was appointed.
(4) Ineligibility.—
Beginning on January 1, 2028, an individual who is a member of an audit entity of an executive agency is not eligible to serve as a member of the Board.
(c) Duties.—
The Board shall—
(1) ensure that the cost accounting standards used by Federal contractors rely, to the maximum extent practicable, on commercial standards and accounting practices and systems;
(2) not later than 180 days after the date of enactment of this paragraph, and biennially thereafter, review any cost accounting standards established under section 1502 of this title and eliminate or conform such standards, where practicable, to Generally Accepted Accounting Principles;
(3) annually review disputes involving such standards brought to the boards established in section 7105 of this title or Federal courts, and consider whether greater clarity in such standards could avoid such disputes, and take necessary action to clarify or improve such standards if misinterpretation or lack of clarity in a standard was a primary component of such dispute; and
(4) ensure that any action taken pursuant to paragraph (3) is not taken solely for the purpose of tailoring such standard to favor a party in the dispute.
(d) Meetings.—
The Board shall meet not less than once each quarter and shall publish in the Federal Register notice of each meeting and its agenda before such meeting is held.
(e) Report.—
The Board shall annually submit a report to the congressional defense committees, the Committee on Oversight and Government Reform of the House of Representatives, and the Committee on Homeland Security and Governmental Affairs of the Senate describing the actions taken during the prior year—
(1) to conform the cost accounting standards established under section 1502 of this title with Generally Accepted Accounting Principles;
(2) to minimize the burden on contractors while protecting the interests of the Federal Government; and
(3) including a summary of rulemaking activities related to any changes to such standards and any associated timelines for such activities.
(f) Senior Staff.—
The Administrator, after consultation with the Board—
(1) without regard to the provisions of title 5 governing appointments in the competitive service—
(A) shall appoint an executive secretary; and
(B) shall appoint, or detail pursuant to section 3341 of title 5, not less than four additional staff members; and
(2) may pay those employees without regard to the provisions of chapter 51 and subchapter III of chapter 53 of title 5 relating to classification and General Schedule pay rates, except that those employees may not receive pay in excess of the maximum rate of basic pay payable for level IV of the Executive Schedule.
(g) Other Staff.—
The Administrator may appoint, fix the compensation of, and remove additional employees of the Board under the applicable provisions of title 5.
(h) Detailed and Temporary Personnel.—
For service on advisory committees and task forces to assist the Board in carrying out its functions and responsibilities—
(1) the Board, with the consent of the head of a Federal agency, may use, without reimbursement, personnel of that agency; and
(2) the Administrator, after consultation with the Board, may procure temporary and intermittent services of personnel under section 3109(b) of title 5.
(i) Compensation.—
(1) Officers and employees of the government.—
Members of the Board who are officers or employees of the Federal Government, and officers and employees of other agencies of the Federal Government who are used under subsection (h)(1), shall not receive additional compensation for services but shall continue to be compensated by the employing department or agency of the officer or employee.
(2) Appointees from private sector.—
Each member of the Board appointed from the private sector shall receive compensation at a rate not to exceed the daily equivalent of the rate for level IV of the Executive Schedule for each day (including travel time) in which the member is engaged in the actual performance of duties vested in the Board.
(3) Temporary and intermittent personnel.—
An individual hired under subsection (h)(2) may receive compensation at a rate fixed by the Administrator, but not to exceed the daily equivalent of the rate for level V of the Executive Schedule for each day (including travel time) in which the individual is properly engaged in the actual performance of duties under this chapter.
(4) Travel expenses.—
While serving away from home or regular place of business, Board members and other individuals serving on an intermittent basis under this chapter shall be allowed travel expenses in accordance with section 5703 of title 5.
(j) Covered Contract Defined.—
In this section, the term “covered contract” means a contract that is subject to the cost accounting standards issued pursuant to section 1502 of this title.
(Pub. L. 111–350, § 3, Jan. 4, 2011, 124 Stat. 3695; Pub. L. 114–328, div. A, title VIII, § 820(a)(1), (3), Dec. 23, 2016, 130 Stat. 2273, 2274; Pub. L. 119–60, div. A, title XVIII, § 1806(b)(1)–(6), Dec. 18, 2025, 139 Stat. 1237–1239.)
text: Historical and Revision Notes
Revised
Section
Source (U.S. Code)
Source (Statutes at Large)
1501(a)
41:422(a)(1) (1st sentence).
Pub. L. 93–400, § 26(a)–(e), as added Pub. L. 100–679, § 5(a), Nov. 17, 1988, 102 Stat. 4058.
1501(b)
41:422(a)(1) (last sentence), (2).
1501(c)
41:422(b).
1501(d)
41:422(c).
1501(e)
41:422(d).
1501(f)
41:422(e).
In subsection (b)(2), the text of 41:422(a)(2)(C) is omitted as obsolete.
In subsection (b)(2)(A), the last sentence is substituted for “of the initial members, two shall be appointed for terms of two years, one shall be appointed for a term of three years, and one shall be appointed for a term of four years” because the initial members have already been appointed.
In subsection (c)(2), the reference to section 5376 of title 5 is substituted for the reference to grade GS–18 of the General Schedule because of section 529 [title I, § 101(c)(1)] of the Treasury, Postal Service, and General Government Appropriations Act, 1991 (Public Law 101–509, 104 Stat. 1442, 5:5376 note).
In subsection (f)(1), the words “Except as otherwise provided in subsection (a) of this section” are omitted because 41:422(a) does not provide any relevant exception.
In subsection (f)(2), the words “private sector” are substituted for “private life” for consistency with subsection (b)(1)(B) of the revised section.
In subsection (f)(3), the words “Executive Schedule” are substituted for “Federal Executive Salary Schedule under section 5316 of title 5” for consistency and to eliminate unnecessary words.
heading: Senate Revision Amendment
text: In subsec. (c)(2), “for level IV of the Executive Schedule” substituted for “under section 5376 of title 5” by S. Amdt. 4726 (111th Cong.). See 156 Cong. Rec. 18682 (2010).
heading: Editorial Notes
heading: References in Text
text: The date of enactment of this paragraph, referred to in subsec. (c)(2), is the date of enactment of Pub. L. 119–60, which was approved Dec. 18, 2025.
Level IV of the Executive Schedule, referred to in subsec. (f)(2), is set out under section 5315 of Title 5, Government Organization and Employees.
heading: Amendments
text: 2025—Subsec. (a). Pub. L. 119–60, § 1806(b)(1), substituted “Office of Management and Budget” for “Office of Federal Procurement Policy”.
Subsec. (b)(1). Pub. L. 119–60, § 1806(b)(2)(A), amended par. (1) generally. Prior to amendment, par. (1) related to the configuration of the Cost Accounting Standards Board.
Subsec. (b)(2)(A). Pub. L. 119–60, § 1806(b)(2)(B)(i), inserted “, which may be extended for an additional 4-year period by the individual who appointed such member under paragraph (1)” after “4 years”.
Subsec. (b)(2)(B). Pub. L. 119–60, § 1806(b)(2)(B)(ii), substituted “paragraph (1)(A)(i)” for “paragraph (1)(A)”.
Subsec. (b)(4). Pub. L. 119–60, § 1806(b)(2)(C), added par. (4).
Subsec. (c)(2). Pub. L. 119–60, § 1806(b)(3)(A), substituted “not later than 180 days after the date of enactment of this paragraph, and biennially thereafter, review any cost accounting standards established under section 1502 of this title and eliminate or conform such standards” for “within one year after the date of enactment of this subsection, and on an ongoing basis thereafter, review any cost accounting standards established under section 1502 of this title and conform such standards”.
Subsec. (c)(3). Pub. L. 119–60, § 1806(b)(3)(B), substituted “disputes, and take necessary action to clarify or improve such standards if misinterpretation or lack of clarity in a standard was a primary component of such dispute; and” for “disputes.”.
Subsec. (c)(4). Pub. L. 119–60, § 1806(b)(3)(C), added par. (4).
Subsec. (e)(3). Pub. L. 119–60, § 1806(b)(4), added par. (3).
Subsec. (f)(1)(B). Pub. L. 119–60, § 1806(b)(5), substituted “shall appoint” for “may appoint” and “not less than four” for “two”.
Subsec. (j). Pub. L. 119–60, § 1806(b)(6), added subsec. (j).
2016—Subsec. (b)(1)(B)(ii). Pub. L. 114–328, § 820(a)(1)(A), inserted “and, if possible, is a representative of a public accounting firm” after “systems”.
Subsecs. (c) to (e). Pub. L. 114–328, § 820(a)(1)(C), added subsecs. (c) to (e). Former subsecs. (c) to (e) redesignated (f) to (h), respectively.
Subsec. (f). Pub. L. 114–328, § 820(a)(1)(B), (D), redesignated subsec. (c) as (f) and amended it generally. Prior to amendment, text read as follows: “The Administrator, after consultation with the Board, may—
“(1) appoint an executive secretary and 2 additional staff members without regard to the provisions of title 5 governing appointments in the competitive service; and
“(2) pay those employees without regard to the provisions of chapter 51 and subchapter III of chapter 53 of title 5 relating to classification and General Schedule pay rates, except that those employees may not receive pay in excess of the maximum rate of basic pay payable for level IV of the Executive Schedule.”
Subsecs. (g) to (i). Pub. L. 114–328, § 820(a)(1)(B), redesignated subsecs. (d) to (f) as (g) to (i), respectively.
Subsec. (i)(1). Pub. L. 114–328, § 820(a)(3)(A), substituted “subsection (h)(1)” for “subsection (e)(1)”.
Subsec. (i)(3). Pub. L. 114–328, § 820(a)(3)(B), substituted “subsection (h)(2)” for “subsection (e)(2)”.
heading: Statutory Notes and Related Subsidiaries
heading: Change of Name
text: Committee on Oversight and Government Reform of House of Representatives changed to Committee on Oversight and Reform of House of Representatives by House Resolution No. 6, One Hundred Sixteenth Congress, Jan. 9, 2019. Committee on Oversight and Reform of House of Representatives changed to Committee on Oversight and Accountability of House of Representatives by House Resolution No. 5, One Hundred Eighteenth Congress, Jan. 9, 2023.
heading: Effective Date of 2016 Amendment
text: Pub. L. 114–328, div. A, title VIII, § 820(d), Dec. 23, 2016, 130 Stat. 2276, provided that: “The amendments made by this section [enacting section 190 of Title 10, Armed Forces, and amending this section and section 1502 of this title] shall take effect on October 1, 2018.”
heading: Deadline
text: Pub. L. 119–60, div. A, title XVIII, § 1806(b)(7), Dec. 18, 2025, 139 Stat. 1239, provided that: “Not later than 90 days after the date of the enactment of this Act [Dec. 18, 2025], the Director of the Office of Management and Budget, the Secretary of Defense, and the Administrator of General Services shall implement the amendments made by this subsection [amending this section], including making the appointments under section 1501(b) of title 41, United States Code, as amended by this subsection .”
heading: Cooperation With the Comptroller General
text: Pub. L. 119–60, div. A, title XVIII, § 1806(c), Dec. 18, 2025, 139 Stat. 1239, provided that: “The Secretary of Defense and the Cost Accounting Standards Board established under section 1501 of title 41, United States Code (as amended by this section), shall cooperate in full and in a timely manner with the Comptroller General of the United States, including providing any analysis, briefings, or other information requested by the Comptroller General related to requirements of this section [amending this section and sections 1502 and 1503 of this title, and enacting provisions set out as notes under this section and sections 1502 and 1503 of this title] and the amendments made by this section.”