Under what circumstances can the head of an agency waive the applicability of Cost Accounting Standards?

The head of an agency has the authority to waive the applicability of Cost Accounting Standards (CAS) under specific circumstances outlined in the regulatory framework governing federal acquisitions. One such circumstance is when contracts are less than $15 million and do not involve CAS-covered contracts. This allows agencies to simplify procurement processes and reduce the administrative burden associated with compliance for smaller contracts.

The rationale for this waiver relates to encouraging competition and participation from smaller businesses, which might be deterred by the complexities and costs associated with strict adherence to CAS. By setting the threshold at $15 million, agencies can better manage costs and efficiently allocate resources while ensuring that the standards are still maintained for larger contracts where the risk of significant federal funding is involved.

The other options, while they touch upon related concepts, do not accurately align with the regulatory provisions regarding CAS waivers. For example, contracts worth less than $10 million and those primarily engaged in commercial sales may have different considerations that do not specifically cite the CAS waiver authority. Similarly, contract length or duration is not a determining factor in the head of an agency's discretion to waive the applicability of CAS, thus making those options less relevant to the context of this question.