On September 30, 2016, DCAA issued the following MRD (Memorandum for Regional Directors): Update – Audit Guidance on the Impact of the National Defense Authorization Act on DCAA’s Audit Support to Non-Defense Agencies. For the record, there isn’t anything captioned “the” National Defense Authorization Act; in this case, it happened to be referring to the 2016 Act, which was presumably “the” Act (to DCAA) because it included Section 893, which prohibits DCAA from providing audit support to non-defense agencies.
Topics: Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support
The incurred cost proposal is required for cost type and time and material contracts subject to the 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, which are listed within the clause (52.216-7(d), thus defining the required schedules for an adequate indirect cost rate proposal.
Topics: Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support
As if you haven’t noticed, this year has been the year of bid proposals for government contractors. My team at Redstone Government Consulting has been working the last six months straight supporting various government contractors in the development and pricing of cost volume proposals. Fortunately for us, we have a team of consultants that can provide support for cost volume proposals and are 100% dedicated to the effort, without the distraction of other projects or responsibilities. Most small business contractors, however, do not have that luxury and the employees working the bid proposal efforts must also continue to complete their daily responsibilities associated with their already busy, “day” job.
Topics: Incurred Cost Proposal Submission (ICP/ICE), DFARS Business Systems
DCAA has recently released a new version of the ICE Model, which is the electronic version of the “Model Incurred Cost Proposal” that provides contractors with a standard ICE submission for preparing adequate incurred cost proposals in accordance with FAR 52.216-7, “Allowable Cost and Payment.” This version 2.0.1e released in December 2015, may be downloaded from DCAA website. There were no computational changes to the newly released version, however, additional information will be required for Schedule J. Schedule J provides DCAA with the Subcontract Information such as contact information, subcontract value, period of performance, costs incurred for each subcontractor, and award type. In the 2.0.1e version, additional information such as prime contract value and subcontractor’s duns number has been added to the required information for this schedule. This is the second version of the ICE Model released this year. ICE Version 2.0.1d released in August 2015, had no computational or functional changes to the previous Version 2.0.1c (June 2012).
Topics: Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support
Most contractors (those with calendar year ends) have incurred cost proposals (ICP) due to the government on June 30 and we know that preparing the incurred cost proposal can be stressful and time consuming. We have prepared 10 helpful tips for contractors to consider when preparing their ICP this year to help alleviate stress, reduce the amount of time spent preparing the ICP and most importantly to result in ICP adequacy.
Topics: Compliant Accounting Infrastructure, Incurred Cost Proposal Submission (ICP/ICE), Contracts & Subcontracts Administration, DCAA Audit Support
It’s that time of year, books are closed, tax data has (maybe) been sent to the CPAs and you are ready to start a new year. However, as a government contractor with cost-reimbursable contracts, for the next 180 days a cloud called the incurred cost submission (due on June 30, 2015) is looming over head. Will this cloud looming become a thunder storm or beautiful clear skies? Well, my friend, that is up to you. Here are the top 5 things to know about the incurred cost submission that will make this year a success in submitting a timely and adequate incurred cost submission.
Topics: Incurred Cost Proposal Submission (ICP/ICE), DCAA Audit Support
In a recent Federal Circuit ruling, KBR found out that “simple negligence” in its calculations of a reasonable price range for subcontractor’s price proposal resulted in a “Gross Negligence ruling” by the courts. Kellogg Brown & Root Services, Inc. (KBR) v. U.S., No. 203-5030, slip op. (Fed. Cir. Feb, 3, 2014).
Topics: Compliant Accounting Infrastructure, Proposal Cost Volume Development & Pricing, Incurred Cost Proposal Submission (ICP/ICE)
The Department of Defense issued a final rule revising the DFARS “Proposal Adequacy Checklist” on January 29, 2014 to eliminate question 19 of that checklist which addresses whether the contractor cost proposal, to which the checklist applies, demonstrates that price analysis of costs for all proposed commercial items was performed. The DOD determined that questions 14 and 17 address price analysis for all proposed materials and subcontracts, commercial or otherwise, therefore making question 19 duplicative and unnecessary.
Topics: Compliant Accounting Infrastructure, Incurred Cost Proposal Submission (ICP/ICE)
Government contractors having undergone DCAA incurred cost proposal audits during this past year have learned several important trends and lessons, some of which will likely continue into 2014, and produce added administrative hardships for most contractors. Some initiatives undertaken by DCAA in conjunction with the DCMA may mitigate the level and duration of audit effort and hasten contract close-outs for some contractors. For example, more contractors will most likely be subject to low-risk determination criteria and expand the number of companies who could escape those audits.
Topics: Incurred Cost Proposal Submission (ICP/ICE), Small Business Compliance, Government Compliance Training, DCAA Audit Support
On August 13, 2013, the Federal Register included a proposed rule to reduce the contractor response time (for comments on past performance ratings) from 30 to 14 days. The change is a required reform (i.e. Congressional expectation) to improve contractor past performance databases; per the rule writers, it will “improve communication with contractors, access to performance information within the government and procedures selecting high performing contractors” and “having this data available within 14 days will be to the advantage of most contractors”. Not that it matters, but this strikes us as a meaningless and inconsequential change (to placate Congress) which will do nothing to improve the timeliness of the acquisition process. Moreover, just one more example where contractual due dates are imposed on contractors (who are then held to these due dates) when few if any due dates are contractually imposed on government auditors or contracting officers. Notably when FAR 52.216-7 was revised in May 2011, public comments suggested that with respect to the annual indirect cost rate proposal (contractor due date for submission is six months after the end of the contractor fiscal year) it also include due dates for incurred cost audits to facilitate contract closeout—in their infinite (and biased) wisdom, the rule makers stated that government due dates would be inappropriate because such due dates might impact the quality of the contract audits. Which begs the question, how does one measure audit quality when DCAA completes so few incurred cost audits?
Topics: Incurred Cost Proposal Submission (ICP/ICE), Contracts & Subcontracts Administration, DFARS Business Systems, DCAA Audit Support