As we outlined in Applicability of DFARS Business System Rules to Small Businesses, small businesses are exempt from Cost Accounting Standards and therefore are not subject to the business system rules, based on the requirements for inclusion in the Business System Clauses as set out in DFARS. DFARS Case 2009-D038 – Defense Federal Acquisition Regulation Supplement; Business Systems-Definition and Administration, final rule issue February 24, 2013 in the Federal Register specifically stated: “DoD does not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because contracts and subcontracts with small businesses are exempt from Cost Accounting Standards (CAS) requirements.”
John C. Shire, CPA

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Topics: Compliant Accounting Infrastructure, DCAA Audit Support
In 1948 the Armed Services Procurement Regulations (ASPR) was issued as a result of the Armed Services Procurement Act, remaining in place until 1978. ASPR defined direct cost as “any cost that is specifically identified with a particular final cost objective, but not necessarily limited to items that are incorporated in the end product as material or labor.” This is a fairly broad definition and clearly establishes that direct cost includes more than direct material and direct labor. The APSR also discussed Other Direct Costs (ODC), which were costs that were not material nor labor and provided examples, such as “travel and subsistence, consultants, telephone, computer costs and report reproduction.”
Topics: Compliant Accounting Infrastructure, DCAA Audit Support
Believe it or not, getting DCAA to show up and complete a “Paid Voucher Review” is “Good News.”
To understand where I’m coming from with this statement, let’s start with a little history. The way DCAA dug itself out of its incurred cost backlog hole was with low risk sampling, provided for under FAR Class Deviation (2012-O0013) – DCAA Policy and Procedure for Sampling Low-Risk Incurred Cost Proposals, issued July 24, 2012.
Topics: Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support