Inaugural Training Event at Redstone GCI's New Location in Huntsville, Alabama FAR Part 31 Cost Principles
October 29, 2014 8:30 AM - 4:00 PM

Overview

Government contracts invoke the unique cost principles contained in FAR (Federal Acquisition Regulations) Part 31.   These principles must be considered in certain (FAR Part 15) contract cost estimating as well as in cost reporting and billing.  Failure to comply with FAR Part 31 can result in the inability to recover costs incurred, potential penalties associated with the unallowable indirect costs and in the worst case scenario, investigations leading to treble damages under the False Claims Act.  In our updated FAR 31 seminar, we will identify and discuss the types of costs which are typically challenged including the developing trends for government contract audits (DCAA) with a particular focus on after-the-fact cost allowability challenges stemming from audits of indirect cost rate proposals.  Our seminar will address potential issues involving direct and indirect costs.

Learning Objectives

At the completion of this one-day comprehensive seminar, participants will be able to:

  • Identify the types of contracts whose contract cost estimating and cost accounting are subject to FAR Part 31
  • Locate and obtain DCAA audit policies
  • List the three fundamental criteria for cost allowability on government contracts
  • Identify the high risk cost categories and the applicable FAR Part 31 allowability criteria
  • Distinguish unallowable costs from expressly unallowable costs and apply the penalties for failure to comply with FAR Part 31 on incurred cost proposals

Course Content

The course will cover the following topics:

  • FAR 31 applicability and exemptions
  • Distinctions between FAR and CAS
  • Accounting for unallowable costs
  • Direct costs distinguished from  indirect costs and cost allocability concepts
  • Cost reasonableness principle including recent developments and trends
  • Cost documentation standards including records retention and statute of limitations on government claims
  • Advance agreements
  • Certification of indirect costs and penalties provisions
  • Case studies and examples demonstrating the sometimes minor difference between allowable/recoverable costs and unallowable/non-recoverable costs.

The course will cover some of the most high-risk cost categories in FAR Part 31.205 including:

  • Employee morale and welfare vs. entertainment
  • Advertising and public relations
  • Compensation (including a discussion of two ASBCA case)
  • Professional and consulting fees
  • Travel and business meetings
  • Legal costs
  • Selling and marketing
  • Reasonableness
  • Documentation