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.
What is the purpose of a Contract Brief?
The purpose of the Contract Brief is to summarize all pertinent terms, conditions, and the specific requirements agreed to in the contract regarding allowability, allocability and reasonableness of cost for the individuals responsible for preparing public vouchers/billings on government contracts to ensure billings comply with the requirements/terms and conditions of the contract. From an administration perspective, if properly updated, the brief can also be used to track the life of the contract by capturing all modifications relative to cost, terms and conditions and scope changes.
Why is it Necessary?
When a contractor signs a contract with the government, the contractor must fully comply with all terms and conditions included in the contract. It is very important to have a full understanding of what is agreed to in the contract and properly completed briefs can assist in that understanding. While a contract brief should be prepared once the contract is signed, it should also be updated throughout the life of the contract for changes in funding, modifications to the scope of the contract, changes to the period of performance, etc. Contracts Briefs are a good internal control to assist in the preparation of public vouchers submitted to ensure contract terms are met.
Contractors generally submit vouchers on a SF 1034 through Wide Area Workflow. DCAA reviews the first voucher on a DoD cost reimbursable contract. DCAA performs a sampling of future public vouchers based on risk. Rejection of a voucher could result in DCAA increasing the sampling of vouchers and may trigger a post award accounting system review.
FAR 31.201-2 Determining allowability states a cost is allowable only when the cost complies with all of the following requirements – reasonableness, allocability, CAS if applicable, terms of the contract and any limitations set forth in FAR 31.2. Most contractors are familiar with excluding unallowable costs per FAR 31.205 from direct and indirect costs, however, they also have to be aware of specific terms and conditions within the contract. A well-prepared Contract Brief is a great way of summarizing the terms in one place so that the preparer of the public voucher has the information necessary to prepare a billing that complies with the contract terms. The Contract Brief is also a suggested schedule that can be included in the Incurred Cost proposal, Supplemental Schedule O. If not included in the incurred cost proposal, DCAA will likely request copies of the contract briefs during an incurred cost audit.
Common Items on a Contract Brief
Some of the information included in a contract brief is as follows:
- Contract Number
- Date of Award
- Project/Job Number
- Contract Type
- Estimated Cost
- Estimated Fee
- Total Price
- Period of Performance
- Whether Prime or Subcontract
- Acquisition Agency
- Administrative Contract Officer
- Procurement Regulations
- CAS Clauses in Contract
- TINA Clauses in Contract
- Brief Statement of Scope of Work
- Other Special Provisions
- Negotiated Rates if T&M
- Terms of Any Cost Sharing Provisions
- Limitations of Funds/Costs
- Level of Effort Limitations, if applicable
- Contract Ceilings on Indirect Rates
- Whether Facilities Capital Cost of Money is Allowable
- Whether the Contract Includes the FAR Penalty Clause
- Any Precontract or Cost Allowability Restrictions
- Any Restrictions on Overtime
- Restrictions or Special Requirements for Subcontracts
- Any Costs Specifically Made Unallowably by Terms of Contract
- Profit or Fee Provisions in the Contract
- List of Contract/Modifications and Changes in Funding
Some common mistakes found in public vouchers are math errors, billing against the wrong Contract Line Item Number (CLIN), billing in excess of the CLIN funding or funding on the contract, invoice amounts billed in excess of contract ceilings, invoice amounts don’t tie to supporting documentation, approved billing rates not applied to direct costs, using the incorrect Department of Defense Activity Address Code (DoDAAC), duplicate invoice, incorrect or billing outside period of performance, etc.
Contract briefs will aid in preparing adequate public vouchers and can prevent billing errors which can lead to rejection by DCAA and payment delays that could significantly impact cash flow. It is the contractor’s responsibility to bill correctly. Let’s make sure our public vouchers are properly prepared and submitted in accordance with the terms of the contract!!! Establish effective policies, procedures and practices for the preparation of Good Contract Briefs today. If you need assistance in preparing your contract briefs the Redstone GCI team is here to help.