RGCI - 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.

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

Common Mistakes

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.

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Written by Lynne Nalley

Lynne Nalley Lynne Nalley is a Director with Redstone Government Consulting, Inc. providing government contract consulting services to our clients primarily related to Commercial Items, Cost Accounting Standards, DFARS Business System Audits, Proposals, and Incurred Cost. Prior to joining Redstone Government Consulting, Lynne served in several capacities with DCAA and DCMA for over 35 years. Lynne began her career working with DCAA in the Honeywell Resident Office, Clearwater, FL in 1984. Lynne’s experience included various positions which involved conducting or reviewing forward proposals or rate audits, financial capability audits, progress payments, accounting and estimating systems, cost accounting standards, claims and disclosure statement reviews. She is an expert in FAR, DFARS, CAS and testified as an expert witness. Lynne assisted in drafting the commercial item guidance for DCAA Headquarters. Lynne was assigned as a Regional Technical Specialist where she provided guidance to 20 field offices on highly complex or technical issues relative to forward pricing, financial capability or progress payment issues. As an Assistant for Quality, she was involved in reviewing and ensuring audit reports were in compliance with policy and GAGAS as well as made NASBA certified presentations to the staff including but not limited to billing reviews, CAS, unallowable cost and progress payments. To enhance her experience in government contracting, Lynne accepted a position with DCMA in 2015 as part of the newly organized DCMA Cadre of Experts in the Commercial Item Group. This included performing reviews of prime contractor’s assertions and/or commercial item determinations as well as performing price analyses. She was a project lead and later became a lead analyst where she engaged with the buying commands on requests and reviewed price analysis reviews performed by a team of 5 analysts. She also assisted the DCMA CPSR team relative to commercial items and co-instructed the Commercial Item Training presented to DCMA. Lynne currently specializes in assisting companies with Business System Reviews and complex DCAA audit issues related to business systems and CAS. She also assists with prime contractor commercial item determinations and related support. Education Lynne earned a Bachelor of Science Degree in Accounting from University of Central Florida.

About Redstone GCI

Redstone Government Consultants are a team of the most senior industry veterans and the brightest new talent in the industry. Many have held senior government positions including leadership roles in the DCAA. Our new talents bring significant accounting and software experience along with fresh perspectives, inspiration and energy to our team. Through our leadership and combined experience, we provide a unique perspective, bringing both government and contractor proficiencies to bear and ensuring rock-solid government compliance for our clients.

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