FASB Proposed Change Impacting Cost Accounting for Software

Normally, I make numerous references to the Federal Acquisition Regulations (FAR) when writing. However, there is only one FAR reference for this topic, and then we must turn to the Accounting Standards Codification (ASC). In this case, that single FAR reference is FAR 31.201-2(a)(3).

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Topics: Compliant Accounting Infrastructure, Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support, Federal Acquisition Regulation (FAR)

Cost Accounting Standard (CAS) 411 – Accounting for Acquisition of Material Cost

CAS 411 provides criteria for accounting for the measurement and assignment of material costs to cost objectives and follows generally accepted accounting principles (GAAP).

What is the Purpose of CAS 411?

If you don’t have contracts subject to full CAS, then FAR 31.205-26 Material costs requires contractors to implement GAAP when accounting for material. Material costs can either be charged direct to a contract or assigned to contracts through inventory accounts. Material that is charged direct should be identified on the purchase order and material assigned through an inventory account should be consistently applied by category of material. While CAS 411 requires written policies for accounting for material, it is a best practice to establish written policies whether CAS 411 is applicable or not.

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Topics: Compliant Accounting Infrastructure, Proposal Cost Volume Development & Pricing, DCAA Audit Support, Government Regulations, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR), Material Management and Accounting System (MMAS)

The Final Rule on the Cybersecurity Maturity Model Certification (CMMC) Program is Here

On October 15, 2024, the Department of Defense (“DoD”) published the final rule of the Cybersecurity Maturity Model Certification (“CMMC”) requirements in Title 32 of the Code of Federal Regulations, effective December 16, 2024. The Final Rule updates DoD national security regulations to ensure contractors have implemented cyber security measures to safeguard Federal Contract Information (FCI) and Controlled Unclassified Information (CUI). CMMC will be contractually required when the Defense Federal Acquisition Regulation (“DFARS”) clause has not been finalized (see our article, “DoD Issues CMMC Proposed Rule – Submit your comments by October 15, 2024”). We will refer to this DFARS clause throughout this blog as the DFARS CMMC Clause Final Rule.

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Topics: Contracts & Subcontracts Administration, Government Regulations, Federal Acquisition Regulation (FAR), Cybersecurity

ASBCA Turns the Tables on the Sovereign Act Defense

I wrote an article in 2022, “The Future Does Not Look Good For COVID-Related REAs.” Well, it looks like things may have changed. On October 2, 2024, the Armed Services Board of Contract Appeals (ASBCA) issued its decision in the Appeals of Chugach Federal Solutions, Inc. ASBCA Nos. 62712, 62713, and 62877. In this case, the Board “rule[d] the government … failed to carry its burden to establish the sovereign acts defense.”

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Topics: Contracts & Subcontracts Administration, Government Regulations, COVID-19, Federal Acquisition Regulation (FAR)

New DCAA Director Appointment Brings Potential Opportunities

The Department of Defense (DoD) Comptroller announced the new Defense Contract Audit Agency (DCAA) Director on October 21, 2024, as Ms. Jennifer Desautel. Ms. Desautel was previously the Assistant Director, Policy and Quality was responsible for the formation, development and issuance of contract audit policy and quality assurance within DCAA and its over 4,000 employees in nearly 300 locations. The DoD Comptroller in his announcement sited her extensive experience with DCAA operations and mission as well as her strong alliances across DoD and industry made her ideally suited to lead DCAA.

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Topics: Contracts & Subcontracts Administration, Government Compliance Training, DCAA Audit Support, Government Regulations

Don’t Forget the Government Property During Contract Closure

So, the title is maybe a little misleading, and don’t worry – DCMA won’t let you forget the Government property during contract closure. Government property closeouts are only a singular piece to the contract closeout process. And like with all things Government property, the closeout process takes teamwork from both the contractor side and the Government side to be successful.

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Topics: Contracts & Subcontracts Administration, DFARS Business Systems, DCAA Audit Support, Government Regulations, Government Property Management, Federal Acquisition Regulation (FAR)

Small Business Reality vs. DCAA Accounting System Expectations

Every small business that receives a Federal Government cost reimbursable contract is expected, by the Defense Contract Audit Agency (DCAA), to have a “sound internal control environment, accounting framework, and organizational structure.”

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Topics: Compliant Accounting Infrastructure, Small Business Compliance, DCAA Audit Support, Government Regulations, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR)

Reaching Beyond FAR 12 Contracts: Lessons from the Appeals Court

Yet another interesting case to consider from United States Court of Appeals for the Federal Circuit – ACLR, LLC v. United States Court of Appeals 2013-1190.

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Topics: Litigation Consulting Support, Contracts & Subcontracts Administration, Government Regulations, Federal Acquisition Regulation (FAR)

What Happens When You Choose the Cheapest Option for Unanet Implementation?

Is cheaper always better? When choosing a software system like Unanet for implementation, many organizations are tempted to go with the lowest-cost option. However, while cost might seem like the most immediate concern, focusing solely on price often leads to long-term challenges that can affect your business's financial health and operational efficiency.

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Topics: Compliant Accounting Infrastructure, Small Business Compliance, Unanet

The Government Gets Service for Free: Lessons from Platinum Services vs. Army Dispute

Lessons Learned from a recent Armed Services Board of Contract Appeals (ASBCA) case – Platinum Services, Inc. ASBCA Nos. 62199, 62200.

Bottom Line Up Front

The contractor (Platinum Services, Inc. – PSI), the Army, and even the Board all agree the services were rendered, however, since an official certified claim was not filed within six years from the date of the initial invoicing, the Government does not have to pay.

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Topics: Compliant Accounting Infrastructure, Litigation Consulting Support, Contracts & Subcontracts Administration, Government Regulations, Federal Acquisition Regulation (FAR)