Redstone Government Consulting Blog | DCAA Audit Support (6)

In all types of industries, organizations of any size, located in any part of the world, contracts are the lifeblood that binds their operations. These legal documents delineate the relationship between the parties, becoming the backbone of any commercial transaction, thereby maintaining the health of the organization. But merely having contracts is not enough. How these contracts are managed, specifically how they are filed and stored, plays a crucial role in a company’s overall efficiency and effectiveness. In this blog, we delve into the significance of a contract filing system and its benefits.

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

When contracting with the Federal Government on a cost reimbursement basis, the Government will need to ensure that your accounting system will support the complexity of this type of government contract. To achieve this, the U.S. Government has established various regulations and procedures to assess the accounting systems of prospective contractors. The main instrument is the SF1408: Pre-Award Survey of Prospective Contractor Accounting System. This article provides a comprehensive overview and explanation of the SF1408, its purpose, and its significance in the pre-award process.

Topics: Compliant Accounting Infrastructure, DCAA Audit Support

Comparison to FAR

Like CAS 401, CAS 402, and CAS 405, CAS 406 is part of modified CAS coverage and is one of the first CAS standards a company encounters. It likely will not call for any changes to the company’s cost accounting system if you are compliant with FAR 31.203(g)(2) (Indirect costs). FAR states that for contracts not subject to CAS:

Topics: Contracts & Subcontracts Administration, DCAA Audit Support, Government Regulations, Cost Accounting Standards (CAS)

So, the Defense Contract Agency Audit (DCAA) auditor comes into your office, performs an audit, and…they have findings. What do you do? Wait…is there something that I should not do?

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

Starting back in 2021, DCAA issued updates to its audit programs supporting the audit of incurred cost. Here are a few interesting things we noted in the updates.

Topics: Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support, Government Regulations, Federal Acquisition Regulation (FAR)

While it may be tempting to change the Project Account Group (PAG) in Deltek Costpoint, revenue and billing formulas, revenue and billing formula levels, or a combination of both, you must consider the risks and consequences accompanying this decision.

Topics: Compliant Accounting Infrastructure, DCAA Audit Support, Deltek Costpoint

Comparison to FAR

Like CAS 401 and CAS 402 (see previous blog posts on these CAS Standards), CAS 405 is part of modified CAS coverage and is one of the first CAS standards a company encounters. Compliance with this standard will likely not call for any changes to the company’s cost accounting system if the company is compliant with FAR 31.201-6 (Accounting for Unallowable Costs) because the FAR clause has more requirements than CAS 405.

Topics: Contracts & Subcontracts Administration, DCAA Audit Support, Government Regulations, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR)

Comparison to FAR

Like CAS 401, CAS 402 is part of modified CAS coverage and is one of the first CAS standards a company encounters. It likely will not call for any changes to the company’s cost accounting system because Federal Acquisition Regulations (FAR) 31.202 (Direct costs) and 31.203 (Indirect costs) give us words very similar to the CAS words.

Topics: Contracts & Subcontracts Administration, DCAA Audit Support, Government Regulations, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR)

Whether you call it “defective pricing” (DP) or Truth in Negotiations Act (TINA) or even the current labeling of Truthful Cost or Pricing Data Act (TCoPD - 41 USC Ch. 35) there is not much new about the impact to Federal Government contractors. The law supporting this goes back to 1962 in an environment where Congress believed contractors were overcharging the Government for negotiated goods or services. My how times have not changed. This could also describe our current Congress and may create worry among government prime and subcontractors.

Topics: Contracts & Subcontracts Administration, DCAA Audit Support, Federal Acquisition Regulation (FAR), Estimating System Compliance

As the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) season ramps up we have noticed a trend when it comes to award of SBIRs and Small Business Technology Transfer (STTRs) to small businesses in regard to cost analysis as part of Phase 1 awards, as well as dealing with the administration associated with a Phase 2 cost-reimbursable awards. A significant part of the SBIR process is to educate small businesses on the process and controls required to do businesses with the U.S. Government. The cost-reimbursable nature of phase 2 awards inevitably means that small businesses will have the opportunity to undergo accounting system adequacy determination, develop provisional billing rates, and undergo incurred cost submission review or audit. These are key barriers to entry to many businesses seeking to work with the U.S. Government and the pursuit of SBIR/STTR work not only provided necessary funding for small business research and development (R&D), but also an avenue to clear necessary hurdles when it comes to the back-office compliance. At least that was the case historically.

Topics: Small Business Compliance, Contracts & Subcontracts Administration, DCAA Audit Support, Government Regulations, Federal Acquisition Regulation (FAR)