As every government contractor is no doubt aware, no business is immune (no pun intended) from the potentially devastating economic impact of the global coronavirus outbreak. As we confront new restrictions, with the possibility of more to come, on both businesses and employees that could last for months, the costs continue to mount.
We have received a number of inquiries from clients related to cost allowability for Employee Stock Ownership Plans (ESOPs). In this Part II, we focus on the cost allowability rules and regulations for government contractors (Part I provided a more general description of ESOPs).
Congressman Mac Thornberry recently introduced the “Defense Acquisition Streamlining and Transparency Act” to improve the acquisition system and workforce, and improve transparency in the acquisition system. Click here to download the 80-page bill.
Since most incurred cost proposals (ICPs) are due June 30, it is a good time for contractors to review the DCAA criteria for audit selection in order to minimize (where possible) the potential that their ICP will be selected for audit. All ICPs with an auditable dollar volume (ADV) greater than $250 million are automatically selected for audit. ICPs with an ADV between $100 million and $250 million of ADV that have not been audited in the last 3 years are also automatically selected for audit. ADV is determined by the amount of cost reimbursable, i.e. cost type and T&M, contract revenue for the fiscal year.