Strange Bedfellows Department

The cost accounting standards issue has led to the creation of an unusual coalition of the Bush administration, federal unions and mainly Democrats in Congress favoring the standards as a way of improving accountability in a time of mistrust of corporate financial statements. In a policy statement, the White House said that “accounting standards ensure that federal contractors accumulate and report consistently on their incurred contract costs. Government contractors, including those that contract with FEHB, must be held to the highest accounting principles and standards. Additionally, a statutory moratorium is not required as existing law provides for an administrative process to exempt or waive classes or categories of contracts from any or all CAS requirements.” Meanwhile, Blue Cross/Blue Shield and many congressional Republicans, led by House civil service chairman Rep. Dave Weldon, R-Fla., oppose the standards as unnecessary. Blue Cross/Blue Shield has raised the possibility of dropping out of the program rather than going through the expense of altering its accounting systems. Bush administration officials have said they hope the issue can be worked out, but the American Federation of Government Employees has taken a harder line.