On April 9, 2025, President Trump signed the Executive Order (EO), Modernizing Defense Acquisitions and Spurring Innovation in the Defense Industrial Base. The EO indicated that the factory floor is as significant as the battlefield, and the current defense acquisition system must have a comprehensive overhaul to deliver state-of-the-art capabilities at speed and scale.
Topics: Proposal Cost Volume Development & Pricing, Contracts & Subcontracts Administration, Contractor Purchasing System Review (CPSR), Government Regulations, Federal Acquisition Regulation (FAR), Commercial Item Determination
There is no definition of split purchases in the Federal Acquisition Regulation (FAR) or Defense Federal Acquisition Regulation Supplement (DFARS). However, the Defense Contract Management Agency reviews purchase order files for split purchases during a Contractor Purchasing System Review. The Government considers a split purchase when a contractor intentionally breaks down a requirement to stay under a regulatory threshold (e.g., micro-purchase, simplified acquisition threshold, or Truthful Cost or Pricing Data Act (TINA)) in order to circumvent procurement requirements or avoid having to compete.
Topics: Contracts & Subcontracts Administration, DFARS Business Systems, DCAA Audit Support, Contractor Purchasing System Review (CPSR), Government Regulations, Federal Acquisition Regulation (FAR)
Executive Order 141713, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, has left many unsure as to what you can, cannot, should, or should not do. You are not alone! There are many unanswered questions, so we do not and could not claim to have all the answers, but we do have some thoughts and suggestions to consider at this stage.
Topics: Contracts & Subcontracts Administration, Human Resources, Government Regulations, Office of Federal Contract Compliance Programs, Federal Acquisition Regulation (FAR)
It may be an understatement to say defense contractors are currently living in changing times. Change has happened in our government administration resulting in some changes in priorities in federal government programs. This can translate into federal government contracts being changed, suspended, stopped, or even terminated. Although contract terminations seem complex, you can navigate through the complexities by reading and understanding your contract clauses, the acquisition rules, working with your contracting officer, and knowing your cost reporting system and how it can comply with contracting regulations.
Topics: Contracts & Subcontracts Administration, Government Regulations, Federal Acquisition Regulation (FAR), REAs, Claims & Terminations
How much do you know about DCAA and its oversight of your incurred cost proposals (ICP) and indirect cost rates? Would it help to understand what is done and why? Knowing what initiates a DCAA audit of an incurred cost proposal and maintaining a good system of internal controls can potentially keep you from audit.
Topics: Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support, Government Regulations, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR)
Job costing for government contracts is inherently complex—there’s a lot of money to allocate across multiple projects, involving numerous employees. Unfortunately, QuickBooks Online (QBO) doesn’t handle this complexity very well when it comes to payroll. The system struggles with efficiently tracking labor dollars across multiple projects and accounts simultaneously. Here’s an example to illustrate:
Topics: Compliant Accounting Infrastructure, Incurred Cost Proposal Submission (ICP/ICE), Small Business Compliance, Quickbooks, Federal Acquisition Regulation (FAR)
The now infamous NIH Guidance (NOT-OD-25-068) and Executive Order 14222 started us thinking. Is the Department of Defense (DoD) possibly the next domino to fall? After all, the DoD has a very large contract spend of $431.4 billion based on the Defense Spending by State, FY 2023 — Executive Summary. We looked to see if we could find data on how much of that spend is going to indirect costs (i.e., overhead). Surprisingly, the only data we could find is very dated. The data comes from the DoD Indirect-Cost Management Guide from October 2001 posted on the Defense Acquisition University (DAU) website. The guide states, “estimates made by the Defense Contract Management Command (DCMA), in conjunction with discussions with defense contractor top management on their DCMA Overhead Initiative, indicate[s] that indirect costs constitute approximately $90 billion of the $170 billion total DoD work in process at all defense contractor[s].” While not clear, our assumption is that this represents the 2000 or 2001 timeframe. Based on this, DoD is spending 53% of its appropriated funding on indirect costs. This means the average defense contractor has an approximate 100% indirect cost rate, covering overhead and general & administrative (G&A) costs. Based on recent experiences with our clients, we believe this is still a reasonable estimate of indirect cost on DoD contracts, if not a little higher.
Topics: Compliant Accounting Infrastructure, Proposal Cost Volume Development & Pricing, DCAA Audit Support, Government Regulations, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR)
If you only have FAR-based contracts, you only have one set of regulations to follow – Federal Acquisition Regulations. But what happens if you have both FAR-based contracts and grants? Grants are covered under a whole different set of requirements in 2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Let’s walk through some of the differences.
Topics: Compliant Accounting Infrastructure, Government Regulations, Federal Acquisition Regulation (FAR), Grants & Cooperative Agreements (2 CFR 200)
What is a Department of Defense (DoD) class deviation? It is a deviation from the Federal Acquisition Regulation (FAR) or Defense Federal Acquisition Regulation (DFARS) that affects more than one contract. They are issued by an authorized official and are used to deviate from the FAR or DFARS and offer flexibility in the acquisition process. Class deviations are supposed to be temporary. If the class deviation will become permanent, the Government is supposed to issue a proposed revision to the FAR or DFARS.
Topics: Contracts & Subcontracts Administration, System Award Management (SAM), Government Regulations, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR), Cybersecurity
The Federal Funding and Accountability Transparency Act (FFATA) requires prime contractors to report their first-tier subcontracts and grant recipients to report their first-tier subawards using the Federal Funding and Accountability Transparency Act Subaward Reporting System website.
Topics: Employee & Contractor Compensation, Contracts & Subcontracts Administration, DFARS Business Systems, Contractor Purchasing System Review (CPSR), System Award Management (SAM), Government Regulations, Federal Acquisition Regulation (FAR)