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CAS and DCAA Applicability - Responding effectively to a Primes apparent unreasonable request

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We are in negotiations with a large business partner for a new task order, and we have run into a requirement from that business partner which we have not encountered in the past. They are requiring things that appear to negate the exemption that “small businesses” have from DCAA’s CAS rules, referenced in DCAA Audit Manual, Chapter 8. 103.2 CAS Exemption. We are looking for a way to convince our prime contractor that we, as a small business, can be awarded cost contracts. Do you have any suggestions on how to resolve this issue? RESPONSE: I SURE DO and you actually provided the answer........

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