Again, this year our friendly DCAA auditors have taken up the government requirement to calculate and publish annually the new compensation cap as provided for in Section 702 of the Bipartisan Budget Act of 2013 (BBA; Pub. L. 113-67), dated December 26, 2013. The 2025 compensation cap amount is $671,000. Below we have provided the compensation caps going back to 2019.
Topics: Proposal Cost Volume Development & Pricing, Employee & Contractor Compensation, Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support, Government Regulations, Federal Acquisition Regulation (FAR)
Normally, I make numerous references to the Federal Acquisition Regulations (FAR) when writing. However, there is only one FAR reference for this topic, and then we must turn to the Accounting Standards Codification (ASC). In this case, that single FAR reference is FAR 31.201-2(a)(3).
Topics: Compliant Accounting Infrastructure, Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support, Federal Acquisition Regulation (FAR)
The Court of Appeals decision came out on June 26, 2024, and I have been trying work it through my head how they got to their decision. I for sure do not have an answer but I have come up with some ideas and concerns. International Development Solutions, LLC v. Secretary of State, U.S. Court of Appeals, Federal Circuit, 68 CCF ¶82,658, (Jun. 26, 2024)
Topics: Compliant Accounting Infrastructure, Litigation Consulting Support, Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support, Federal Acquisition Regulation (FAR)
So, you have been notified by the Defense Contract Audit Agency (DCAA) that they plan on performing an incurred cost audit. What comes next? How is this audit being performed? You are probably not going to get this background from your DCAA auditor. This article will go over the process that will be applied to take a little of the “mystery” away.
Topics: Compliant Accounting Infrastructure, Incurred Cost Proposal Submission (ICP/ICE), Government Regulations
The rush to close any accounting system for the previous year is everyone’s top priority at the beginning of the new year. Why? We have forms to file. We have performance numbers to report. The annual Incurred Cost Submission is a top priority for government contractors with cost-type contracts. The Incurred Cost Electronically (ICE), or Incurred Cost Submission (ICS), is a highly formatted spreadsheet model with many worksheets (17 required and 6 optional) that provides a standard electronic package to assist in preparing adequate incurred cost submissions. The ICE spreadsheet model also helps with audit support and is the final version of reported costs incurred and billed within a year.
Topics: Compliant Accounting Infrastructure, Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support, Unanet
Federal Acquisition Regulations (FAR) 42.101 provides that normally, “the Defense Contract Audit Agency (DCAA) is the responsible Government audit agency.” While DCAA’s website states “DCAA provides audit and financial advisory services to DoD and other federal entities responsible for acquisition and contract administration.” DCAA only has appropriated funds to provide services to the Department of Defense (DoD). All other federal agencies must pay for DCAA services. This can make a decision related to the necessity of an audit service a budget-based decision. Today, DCAA is current on the required incurred cost audits of contractors with DoD contracts, but contractors with mostly National Aeronautics and Space Administration (NASA) contracts are years behind in their required incurred cost audits. If, as the FAR states, “DCAA is the responsible Government audit agency,” why is it not a Federal audit agency (dare we say – FCAA)? This would make things much easier for NASA and other federal agencies that need their contracts audited. However, given that this isn’t the case, DCAA is not the only option for federal agencies. Many agencies other than DoD have contracted with third-party CPA firms to get necessary audits performed.
Topics: Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support, Government Regulations, Grants & Cooperative Agreements (2 CFR 200)
Our friendly DCAA auditors have taken up the government requirement to calculate and publish annually the new compensation cap as provided for in Section 702 of the Bipartisan Budget Act of 2013 (BBA; Pub. L. 113-67), dated December 26, 2013. The 2024 cap amount is $646,000. Below, we have provided the compensation caps going back to 2016.
Topics: Employee & Contractor Compensation, Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support, Government Regulations, Federal Acquisition Regulation (FAR)
Contractors need to understand the laws for applying state sales and use taxes to purchased goods and services on government contracts. It can be a costly mistake that eats away at your profit.
Topics: Compliant Accounting Infrastructure, Incurred Cost Proposal Submission (ICP/ICE), Small Business Compliance, Contracts & Subcontracts Administration, DFARS Business Systems, Government Regulations, Government Property Management, Federal Acquisition Regulation (FAR)
It’s that time of year to start thinking about the preparation of the incurred cost proposal if you are a Contractor with flexibly priced contracts. The incurred cost proposal is required for cost type, time, and material contracts subject to FAR 52.216-7, “Allowable Cost and Payment.” Cost type and time and material contracts have a cost-reimbursable element that needs to be trued up (i.e., final indirect rates), hence the reason for the incurred cost proposal. There are many subsections listed within the FAR clause 52.216-7(d), thus defining the required schedules for an adequate indirect cost rate proposal.
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)