Are You Ready for a Cost Reimbursable Contract Award?
Subscribe to our Newsletter

 

FOLLOW US

 

By Topic  |   By Industry  |   By Author  |   By Date  |   Useful Links
Are You Ready for a Cost Reimbursable Contract Award? 
government contractor and technology  risk services 

 

By: Kiran Pinto
Abstract:
The issuance of time and materials and cost reimbursement contracts requires contractors to have an adequate accounting system.

 

Key elements of DCAA’s “Preaward Survey of Prospective Contractor Accounting System” (SF 1408)  are:

 

  • Proper segregation of direct costs from indirect costs
  • Identification and accumulation of direct costs by contract
  • Allocation of indirect costs to intermediate and final cost objectives in a logical and consistent method
  • Accumulation of costs under general ledger control
  • A timekeeping system that identifies employees’ labor by intermediate or final cost objectives
  • A labor distribution system that charges direct and indirect labor to the appropriate cost objectives
  • Interim (at least monthly) determination of costs charged to a contract through routine posting of books of account
  • Exclude costs charged to government contracts which are not allowable by FAR Part 31, Contract Cost Principles and Procedures, or other contract provisions
  • Identification of costs by contract line item if required by the proposed contract
  • Segregation of preproduction costs from production costs
  • Provide financial information
    • Required by contract clauses concerning limitation of cost or limitation on payments
    • Required to support requests for progress payments


For more information on the objectives of this audit, please see DCAA’s Master Document – Audit Program at http://www.dcaa.mil/sap/17740_AP_Pre_Award_Accounting_System.pdf

We can help get you ready for a DCAA accounting system audit by conducting a “DCAA mock audit.”

 

 

We can help get you ready for a DCAA accounting system audit by conducting a “DCAA mock audit.”  We can also provide you with an adequate accounting system letter in the absence of a formal audit from an appropriate cognizant audit agency to submit with your proposal to the government.