Contractors subject to FAR 52.216-7, “Allowable Cost and Payment” clause are required to submit, to the cognizant contracting officer and DCAA auditor, an electronic final indirect cost rate proposal in accordance with FAR 42.705-1(b)(1) within six months after the end of the contractor’s fiscal period. This final indirect cost rate submission will primarily be used to establish final indirect rates; however, it has evolved to also serve the purpose of establishing total allowable (direct and indirect) contract costs. DCAA has recently released a new version of the ICE Model, which is the electronic version of the “Model Incurred Cost Proposal” which provides contractors with a standard ICE submission for preparing adequate incurred cost proposals in accordance with FAR 52.216-7, “Allowable Cost and Payment.” This version, 2.0.1f (released in October 2016), may be downloaded from the DCAA website. There were no computational changes to the newly released version; only minor changes to headings and abbreviations. The following are the changes:
- Supplemental Schedule C, “Release to Prime” (column F) heading change; added “Yes/No” so that required entry would be self-explanatory.
- Schedule H removed occurrences of the abbreviation “Var” and the word “Various.”
In August 2015, a note was added to Supplemental C to clarify what information is to be entered on this schedule. It seems DCAA is taking this schedule a step further in order to better clarify one column of this schedule. Supplemental Schedule C requires the identification of prime contracts under which the contractor performs as a subcontractor. This information is required at the pricing level (e.g. delivery order, CLIN) for all subcontract efforts (e.g. cost-type, incentive contracts, T&M/LH, FFP, etc.). This is different from Schedule J, which requires identification of subcontracts you have awarded to companies for which you are the prime or upper-tier contractor, including inter-divisional effort. Supplemental C requires contractors to include all contracts in which the company is a subcontractor, no matter the prime contract type. Therefore, firm fixed price and commercial contracts in which the company is a subcontractor would be included on this schedule. It is important to note that supplemental information is not required to determine if an indirect cost rate proposal is adequate, but may be required during the audit process. It’s debatable whether or not providing subcontract information on a fixed-price prime contract serves any meaningful purpose, but this does not prevent DCAA from requesting Supplemental Schedule C.
Schedule H, which is the Schedule of Direct Costs by Contract/Subcontract and Indirect Expenses Applied at Claimed Rates, had minor revisions to the title of each section. The “Var” was excluded from the Time & Material, Fixed Price, and Commercial Work section. Schedule H requires contracts be grouped by contract type. Cost type, other flexibly priced time and material, fixed price, and commercial work are the sections provided by DCAA ICE Model. Costs per contract are shown by each direct cost element and indirect rates are applied to calculate the total costs per contract. Again, no computation change--just cleanup of contract type section titles.
No computational or functions changes have been made to the ICE Model since June 2012. Schedule J was revised in version 2.0.1e (released in December 2015) requiring additional information, such as prime contract value and the subcontractor DUNS number. These are all minor changes, but information that DCAA will expect to see before it will audit your Indirect Cost Rate Proposal. For those considered low-risk, this is information that DCAA will insist on, even though they accept your indirect rates as proposed.