NDAA Raised the CAS and TINA Thresholds — These Changes Are Already in Effect and Every Defense Contractor Must Recalibrate

Published August 28, 2026 | TIKC NewsWire

Two of the most significant compliance reforms in the FY2026 National Defense Authorization Act are already in effect — and a significant number of defense contractors have not yet recalibrated their compliance posture to reflect them. A significant increase in the threshold for requiring certified cost or pricing data took effect for certain defense contracts on July 1, 2026. Section 1804 of the FY2026 NDAA increased the threshold from $2.5 million to $10 million. And separately, Section 1806(d) of the NDAA text increases the threshold for the mandatory application of CAS at the contract level from $2.5 million to $35 million, effectively eliminating the current CAS trigger contract mechanism. Together, these two changes represent the most significant reduction in defense contractor accounting compliance burden in a generation — and they require immediate action by every defense contractor to correctly recalibrate their obligations.

Change 1: The TINA Threshold Is Now $10 Million

The Truthful Cost or Pricing Data Act — historically known as the Truth in Negotiations Act, or TINA — requires contractors to submit certified cost or pricing data when negotiating defense contracts above the applicable threshold. Certified cost or pricing data means current, accurate, and complete data about your actual costs — not estimates — that the government uses to evaluate whether your proposed price is fair and reasonable. Submitting defective pricing data — data that is inaccurate, incomplete, or not current as of the certification date — gives the government the right to reduce the contract price by the amount the defective data overstated costs, plus interest and potential penalties.

Section 1804(c) raises this threshold to $10 million for contracts entered into after June 30, 2026. This provision applies the new $10 million threshold to defense contracts. Inaccurate certified cost or pricing data may reduce contract price, trigger penalties, and even expose companies to False Claims Act liability. For contractors with contract values between $2.5 million and $10 million, the immediate practical effect is that TINA’s submission and certification requirement no longer applies to new contracts in that range. You no longer need to submit certified cost or pricing data for a $4 million contract, a $6 million contract, or an $8 million contract — where previously you did.

Change 2: The CAS Threshold Is Now $35 Million

Cost Accounting Standards are a set of 19 standards governing how contractors accumulate and allocate costs under government contracts. CAS compliance requires dedicated accounting systems, disclosure statements, and DCAA audits — creating significant compliance infrastructure costs that have historically deterred commercial firms and smaller contractors from pursuing defense work. Under the prior framework, a negotiated prime contract or subcontract above $2.5 million could trigger CAS coverage if the contractor also received at least one CAS-covered contract valued at $7.5 million or more.

Section 1806(d) raises this threshold to $35 million. This effectively eliminates the current CAS trigger contract mechanism, which required the contractor to receive at least one CAS-covered contract valued at $7.5 million or more before other contracts became CAS-covered. For the vast majority of small and mid-size defense contractors — including most certified small businesses, 8(a) participants, and emerging defense contractors — this change means they will no longer face CAS coverage on new contracts. The compliance burden that has kept smaller firms out of cost-type defense contracting has been dramatically reduced by a single NDAA provision.

What This Means for Your Compliance Program

Apply the new thresholds to contracts entered after July 1, 2026 only. Both the TINA and CAS threshold increases apply prospectively — to contracts entered into after the specified effective dates. Existing contracts and contracts entered before the effective dates remain subject to the prior thresholds. Do not assume the new thresholds apply retroactively to existing obligations.

If you have previously been CAS-covered, reassess your coverage status under the new threshold. If the new $35 million threshold means your contract portfolio no longer triggers CAS coverage on new awards, you still need to comply with CAS on existing covered contracts until they close. But your future contracting decisions may be significantly simplified — and that simplification should factor into your business development strategy.

The FCA exposure for TINA violations does not disappear — it shifts to higher-value contracts. TINA’s certification requirement now applies to defense contracts above $10 million. The FCA consequences of submitting defective pricing data — price reduction, penalties, treble damages — apply to every negotiation above that threshold with the same force they applied at $2.5 million. If anything, the higher threshold means the government expects even more rigorous cost data accuracy on contracts large enough to require submission.

Commercial item and fixed-price contractors may see the largest benefit. The DoD’s push toward fixed-price contracts — combined with the NDAA’s CAS and TINA threshold increases — is cumulatively reducing the accounting compliance burden on commercial firms pursuing defense work. If you have avoided defense contracting because of CAS and TINA compliance costs, the landscape has changed materially. Reassess your entry strategy.

The Bottom Line

The FY2026 NDAA’s CAS and TINA threshold increases are the most significant defense contractor accounting compliance reforms in years, and they are already in effect. If your firm has contracts entered after July 1, 2026, review them against the new thresholds now. If you have been avoiding defense contracting because of CAS costs, the barrier has been materially lowered. And if you are above the new TINA threshold and submitting certified cost data, the FCA stakes have not changed — only the floor has risen. Brick by brick — understand your obligations under the law as it is today, not as it was last year.

Frequently Asked Questions

What is TINA and what does the threshold change mean?

TINA — the Truthful Cost or Pricing Data Act — requires contractors to submit certified cost or pricing data when negotiating defense contracts above the applicable threshold. The FY2026 NDAA raised that threshold from $2.5 million to $10 million for defense contracts entered after June 30, 2026. Contracts between $2.5M and $10M entered after that date no longer require certified cost or pricing data submission under TINA.

What is the new CAS threshold and who is affected?

The FY2026 NDAA raised the CAS coverage threshold from $2.5 million to $35 million. Negotiated prime contracts and subcontracts below $35 million entered after the effective date no longer trigger CAS coverage for most contractors. This eliminates the prior trigger mechanism and dramatically reduces the CAS compliance burden on small and mid-size defense contractors.

Do these changes apply to existing contracts?

No — both the TINA and CAS threshold changes apply prospectively to contracts entered after the specified effective dates (July 1, 2026 for TINA). Existing contracts and contracts entered before the effective dates remain subject to the prior thresholds and their associated compliance obligations.

References

Gordon Rees Scully Mansukhani. (2026, August). August 2026 Government Contracts Legal Update and Podcast. https://www.grsm.com/insight/august-2026-government-contracts-legal-update-and-podcast/

Government Contracts Law. (2026, January). Swept Away: FY2026 NDAA Updates to CAS and Certified Cost or Pricing Data Thresholds. https://www.governmentcontractslaw.com/2026/01/swept-away-fy26-ndaa-updates-to-cas-and-certified-cost-or-pricing-data-thresholds/

Inside Government Contracts. (2025, December). FY26 NDAA Aims to Raise the Dollar Thresholds for the Applicability of CAS and TINA. https://www.insidegovernmentcontracts.com/2025/12/fy26-ndaa-aims-to-raise-the-dollar-thresholds-for-the-applicability-of-cas-and-tina/

About the Author

Melanie Patterson

Founder & CEO of Team Integrity Knowledge Center and creator of GovCon iSource. Former nurse turned entrepreneur with over 10 years guiding small, women-owned, and minority-owned businesses to over $10 million in government awards. Build, grow, scale — brick by brick. Contact