GovCon Revenue Recognition and Sales Commissions and a Little Commentary on GSA IFF

ASC 606, Revenue from Contracts with Customers, had an impact on the way many contractors recognized revenue related to contracts with the Federal Government. Redstone has covered this topic a couple of times (January 26, 2021 Government Contractor Challenges in 2021 Webinar and May 6, 2021 MossAdam/Redstone Webinar Compliance Changes for Government Contractors). ASC 606 also impacts the recognition of sales commissions. The overarching GAAP matching principle requires that the expense of sales be matched to the recognition of the related revenue.

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Topics: Compliant Accounting Infrastructure, Incurred Cost Submission, Defense Contractors, Incurred Cost Proposals, DCAA Audit Support, Accounting & Billing System, Government Regulations, DOD Contractors, Federal Acquisition Regulation (FAR)

DOJ is Diving Deeper into the Paycheck Protection Program (PPP) Pool

The focus of fraud used to be primarily on defense contractors, health care providers and health care suppliers. However, other companies are now being exposed to the Federal Claims Act (FCA) including software companies, private equity financiers, insurance companies, and educational institutions. Additionally, fraud is not just related to companies receiving the funds.

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Topics: Incurred Cost Submission, Defense Contractors, DOD IG, Government Compliance Training, Incurred Cost Proposals, Cost-Type Contracts, Accounting & Billing System, DOD Contractors

DCAA – The Hidden Cost of Audits

Where does DCAA’s View of the Contractor and their Role in Acquisition Come From?

DCAA Auditor Training

DCAA website provides that new auditors receive in-depth professional training from DCAA’s Defense Contract Audit Institute (DCAI), along with on-the-job training at their assigned field audit office. DCAI is located in Atlanta, GA and provides auditors with an excellent basis on which to start their careers in contract audit. Many at Redstone GCI can speak from personal experience that, once you get past the exciting MARTA ride from the airport, the instructors at DCAI provide a good hands-on learning environment. However, we are not sure if it is a subliminal message piped into the classroom or local indoctrination at assigned field offices, but the auditors are coming away with the impression that no contractors can be trusted, and a good audit opinion has to include questioned cost.

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Topics: Compliant Accounting Infrastructure, Litigation Consulting Support, Incurred Cost Submission, Defense Contractors, DOD IG, Government Compliance Training, DFARS Business Systems, Incurred Cost Proposals, Cost-Type Contracts, DCAA Audit Support, Government Regulations, DOD Contractors, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR)

New DCAA Portal for Contractor Incurred Cost Proposal Submissions

DCAA created a new portal called Contractor Submission Portal (CSP) which is addressed in DCAA’s Memorandum for Regional Directors (MRD) 20-OTS-005(R) dated September 29, 2020. The portal allows contractors a means to submit their Incurred Cost proposals electronically. There are three options available to contractors when uploading the incurred cost proposal:

  • Submit a new proposal
  • Update an existing proposal
  • Withdraw a proposal
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Topics: Incurred Cost Submission, Incurred Cost Proposals

Does Your Company Qualify as a “Major Contractor” for IR&D Reporting?

The calendar year ended December 31st and you are closing your books and gathering information for your incurred cost submission that is due June 30th. There is one more requirement you should consider that may have been overlooked. Does your company meet the requirement to input IR&D costs into the Defense Technical Information Center (DTIC)?

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Topics: Incurred Cost Submission, Incurred Cost Proposals, Accounting & Billing System, Cost Accounting Standards (CAS)

Buy American – Don’t Get Caught With Your Documentation Down

What’s new in this long-standing area?

The FAR Council at long last issues final rule to implement the Trump Executive Order 13881, Maximizing Use of American-Made Goods, Products, and Materials. Only a few days later a Biden Executive Order 14005, Ensuring Future of America is Made in America by all of America’s Workers, hit the streets.

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Topics: Business Systems Review, Cost and Pricing and Budgeting, Incurred Cost Submission, Small Business Compliance, Contracts Administration, Defense Contractors, DFARS Business Systems, Incurred Cost Proposals, DCAA Audit Support, Contractor Purchasing System Review (CPSR), Government Regulations, DOD Contractors, Federal Acquisition Regulation (FAR)

DFARS Class Deviation 2020-O0021 and 2020-O0013 Revision

DFARS Class Deviation 2020-O0021 Revision

On January 15, 2021, the Principal Director at Defense Pricing and Contracting (DPC) issued a memorandum on the CARES Act Section 3610 Reimbursement Requests, DFARS Class Deviation 2020-O0021, Revision 2. This memorandum revises and supersedes the DFARS Class Deviation 2020-O0021 Revision 1 issued on October 14, 2020. The only revision is to extend the period for which paid leave must be taken from March 27, 2020 through December 11, 2020 to March 27, 2020 through March 31, 2021. The remainder of the memorandum remains unchanged and details are included in Redstone GCI’s blog.

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Topics: Incurred Cost Proposals, Accounting & Billing System, COVID-19

Incurred Cost Submission Audit: What to Expect?


Contractors with cost reimbursable contracts that include the Allowable cost and payment clause, FAR 52.216-7 or Payments under Time-and-Materials and Labor-Hour contracts clause, FAR 52.232-7, are required to submit an Incurred Cost Proposal for each fiscal year costs were incurred on any cost reimbursable contract. This incurred cost proposal is provided to your Administrative Contracting Officer (ACO) and Defense Contract Audit Agency (DCAA) with a deadline of six months after the Contractor’s fiscal year end. Once the Incurred Cost Proposal is received by DCAA, they review it for adequacy. DCAA provides a notification to the Contractor, typically via email, that the proposal is deemed adequate for audit or outlines changes DCAA believes are necessary. That is great to know it is adequate for audit but what does that mean? This means that DCAA has reviewed the incurred cost proposal and determined that the schedules are properly completed for them to begin the audit potentially.

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Topics: Incurred Cost Submission, Small Business Compliance, Defense Contractors, Incurred Cost Proposals, Cost-Type Contracts, DCAA Audit Support, Federal Acquisition Regulation (FAR)

Thought There Were 52 Unallowable Costs – Not So Fast

A Little Background

FAR Part 31, Cost Principles, is the regulation that government contractors must follow in order to account for cost on most government contracts. Within FAR Part 31 is FAR 31.205, Selected Costs. This part of the cost principles regulation specifically spells out unallowable cost that the government will not pay for under a government contract. This section starts at FAR 31.205-1 and goes all the way up to FAR 31.205-52. However, it should be noted that FAR 31.205-2, 5, 9, 24, 45, and 50 are “Reserved” – These reserved cost areas went the way of the dinosaur over time, hopefully not to return. For example, FAR 31.204-2, Automatic Data Processing Equipment Leasing Costs, required an annual demonstration that leasing computer equipment was cost-effective, i.e., lowest cost to the Federal Government.

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Topics: Incurred Cost Submission, Contracts Administration, Defense Contractors, Government Compliance Training, Incurred Cost Proposals, Cost-Type Contracts, DCAA Audit Support, Government Regulations, DOD Contractors, Federal Acquisition Regulation (FAR)

Are Contract Briefs Necessary?

What is a Contract Brief?

A contract brief is a document which identifies information about the contract, contract administration representatives and significant contract terms and conditions.

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Topics: Incurred Cost Submission, Incurred Cost Proposals, Cost-Type Contracts, Accounting & Billing System