Schedules B, C, D, and Fringe are some of the most important parts of the Incurred Cost Submission. This vLOG will briefly explain the Incurred Cost Submission, how to complete Schedules B, C, D, and Fringe, and the importance of each schedule.
What is the Incurred Cost Submission (ICS)?
The incurred cost submission goes by many names/acronyms including final indirect rate proposal, incurred cost electronic submission, indirect cost rate submission, incurred cost proposal, ICES, ICS or ICP. Regardless of name, it is simply the mechanism for the true up of your actual indirect cost to the indirect costs provisionally billed for in a single contractor fiscal year. An ICS must be submitted for each business unit of a contractor that holds applicable contracts subject to the Allowable Cost and Payment clause (FAR 52.216-7) and is required to be submitted 6-months after fiscal year end.
What are Schedules B, C, D, and Fringe in the ICS?
Within the Incurred Cost Submission, there are many worksheets or tabs in an Excel workbook that are referred to as “schedules”. Previously, we discussed the importance of Schedules I and K. Each schedule in the Incurred Cost Submission is responsible for a piece that culminates on Schedule I, which is the presentation of cumulative cost incurred, cumulative billings, and the calculation of the over or underbilling amount. Some of those schedules that lead to Schedule I are Schedule B, Schedule C, Schedule D, and the Fringe schedule. These schedules create the pool cost for the various indirect rates – Schedule B builds up the G&A pool, Schedule C is for each Overhead pool, Schedule D is for each intermediate expense pool, and the Fringe Schedule is for the fringe pool and base that creates the fringe allocations for the other indirect expense pools.
Why are Schedules B, C, D, and Fringe Important?
Schedule B is important because it is the place in the Incurred Cost Submission that shows the build-up of the G&A pool expenses, and this schedule is also where B&P and IR&D expenses reside. This schedule also receives the applicable intermediate and fringe allocations that go to the G&A pool.
Schedule C in the ICS is important because it is where the build-up of the overhead pool (or pools) expenses belong. This schedule also receives the applicable intermediate and fringe allocations that go to the overhead pool (or pools). This schedule can be repeated to reflect any number of overhead rates.
Schedule D in the ICS is important because it is where the build-up of the intermediate pool expenses belong. An example of pool that belongs on Schedule D is a facilities pool or shared services pool that allocates all its cost to other pools through a specified basis of allocation. The bottom half of Schedule D is for the base that the expenses are allocated on. For example, if the facilities pool has its expenses allocated to G&A and Overhead based on square footage, the bottom of Schedule D will have the square footage attributed to G&A and Overhead. The ICS model provided by DCAA will then automatically allocate the expenses to the G&A and Overhead pool.
The Fringe Schedule in the Incurred Cost Submission is where the build-up of the fringe pool expenses and allocation base belong. The main reason this schedule is important is not only because it shows the buildup of the fringe pool, but because it is the home for the fringe allocations that are sent to the other indirect pools. Typically, the basis of allocation for fringe is total labor dollars (direct and indirect). The bottom of the Fringe Schedule is where the fringe allocations are made. Similar to the bases on Schedule D, all the labor dollars by segment will be entered in and organized by the respective pool. Once the total labor dollars by indirect pool are entered in, the ICS model provided by DCAA will then automatically allocate the expense to each pool that has labor in it.
Schedules B, C, D, and Fringe in the Incurred Cost Submission are some of the most important schedules in the ICS. These schedules lead to the creation of the indirect rates that are calculated in the Incurred Cost Submission that are eventually used to assess the true over and under-billings on Schedule I. Redstone GCI is available to assist contractors in assessing their incurred cost as adequate or inadequate as well as assist in the development of the proposal. Redstone GCI assists contractors throughout the U.S. and internationally with understanding the Government’s expectations in applying FAR Part 31 Cost Principles and completing incurred cost proposal requirements.