Redstone Government Consulting Blog | Government Regulations (2)

Contractors are required to use provisional billing rates when invoicing costs under cost reimbursable contracts or submitting an SF1443 Contractor’s Request for Progress Payment. FAR 42.704, Billing rates, requires the contracting officer or auditor (usually DCAA) to establish the billing rates. DCAA has undergone a reorganization, and the office assigned to your contractor site may have shut down or the staff may have been relocated.

Topics: Compliant Accounting Infrastructure, Incurred Cost Proposal Submission (ICP/ICE), DFARS Business Systems, DCAA Audit Support, Government Regulations, Federal Acquisition Regulation (FAR)

This is a myth. Let’s review the commercial definition:

FAR 2.101 Commercial Product definition Paragraph 1 states:

(1)  A product, other than real property, that is of a type customarily used by the general public or by nongovernmental entities for purposes other than governmental purposes, and–

(i) Has been sold, leased, or licensed to the general public; or

(ii) Has been offered for sale, lease, or license to the general public;

Topics: Contracts & Subcontracts Administration, DFARS Business Systems, Government Regulations, Federal Acquisition Regulation (FAR), Commercial Item Determination

A little background – On April 15, 2025, Executive Order 14275, Restoring Common Sense to Federal Procurement, was issued. The intent of this order was to make revolutionary changes to the Federal Acquisition Regulations (FAR) to make the federal acquisition process more efficient and cost-effective. Section 2 states, “It is the policy of the United States to create the most agile, effective, and efficient procurement system possible. Removing undue barriers, such as unnecessary regulations, while simultaneously allowing for the expansion of the national and defense industrial bases is paramount. Accordingly, the FAR should contain only provisions required by statute or essential to sound procurement, and any FAR provisions that do not advance these objectives should be removed.”

Topics: Compliant Accounting Infrastructure, Proposal Cost Volume Development & Pricing, Contracts & Subcontracts Administration, DFARS Business Systems, DCAA Audit Support, Contractor Purchasing System Review (CPSR), Government Regulations, Federal Acquisition Regulation (FAR), Commercial Item Determination

The de minimis rate is an indirect rate that can be elected by Non-federal entities (State, local government, Indian Tribe, Institution of Higher Education or non-profit) that do not have a current negotiated indirect cost rate agreement (NICRA). The de minimis rate is addressed in 2 Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, specifically 200.414(f).

Topics: Compliant Accounting Infrastructure, DCAA Audit Support, Government Regulations, Federal Acquisition Regulation (FAR), Grants & Cooperative Agreements (2 CFR 200)

Revenue recognition is a very critical and highly scrutinized aspect of accounting for government contractors. Whether you're working on cost-plus contracts, time and materials, or firm fixed price agreements, how and when you recognize revenue can significantly impact your financial reporting and compliance with government regulations.

Topics: Compliant Accounting Infrastructure, DCAA Audit Support, Government Regulations, Cost Accounting Standards (CAS), Federal Acquisition Regulation (FAR)

The Good

Ok, finding some good is going to be a challenge. Let's start with the fact that the Defense Contract Audit Agency (DCAA) receives approximately 3,500 incurred cost proposals annually, but only audits around 500 of them. And even though DCAA is still auditing about 75% of the dollars submitted ($193B), only .3% is questioned ($760M), and only 31% of that is likely to be sustained by contracting officers. This comes from the DCAA Report to Congress for 2024.

See, we did find some good.

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

If only the Government made this an easy answer. There are some representations and certifications that you need to get from your subcontractors. However, many in both industry and the Government think the requirement for “Reps and Certs” flows down in all cases.

Topics: Contracts & Subcontracts Administration, DFARS Business Systems, DCAA Audit Support, Contractor Purchasing System Review (CPSR), Government Regulations, Federal Acquisition Regulation (FAR)

I believe most prudent businesspeople would consider providing water and coffee to their employees and customers a reasonable business expense and consider it an allowable cost. Well, Defense Contract Audit Agency (DCAA) auditors are not most people and, in most cases, have little to no business experience, so they believe providing water and coffee is an unallowable cost.

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

Government contracts can be a great opportunity. They often come with stability, a steady income, and the chance to scale your business. But they also come with strings attached: a detailed set of rules and expectations, especially when it comes to your accounting. Unfortunately, many government contractors learn about those rules the hard way, which is after they’ve already made a mistake. In this article, we’ll walk through some of the most common accounting mistakes that can derail even experienced contractors, cost you money, or worse, jeopardize your contracts.

Topics: Compliant Accounting Infrastructure, Incurred Cost Proposal Submission (ICP/ICE), Small Business Compliance, DCAA Audit Support, Quickbooks, Government Regulations, Federal Acquisition Regulation (FAR)

Labor relations is not just an HR function; it truly is a core leadership responsibility. Suppose your team is a current union organization or considering unionization. In that case, your frontline managers have to be trained to interact with unions not just legally, but also strategically and respectfully. Having untrained managers can quickly escalate potential issues without realizing it. Here is a comprehensive guide to train managers on effective union interactions.

Topics: Human Resources, Government Regulations, Organizational Change Management Consulting, Manufacturing Operations Consulting, Employers & Unions