CPAs and Advisors with Your Growth in Mind

Government Contractors

Auditor Strikes Back: The Proof is in the Pudding – Defending Professional & Consultant Services Cost

As we reported in October, the Defense Contract Audit Agency (“DCAA”) Contract Audit Manual (“CAM”) was recently updated. One of the 13 areas of cost updated related to the allowability of professional & consultant costs. This topic is covered in Chapter 7 of both the previous version and new version of the CAM. The new guidance provides more insight into the evidence required to defend the costs incurred by the contractor. The evidence required by DCAA is to help prove the true nature of the professional services costs and clear up any “gray area” or concerns. Specifically, the guidance states contractors need. Read More.

Topics: , ,

The New Revenue Recognition World

By: Michael Brown, Senior Manager The effective date for the new revenue recognition standard is fast approaching and will be here before we know it. By now, you have probably heard speculation about the impact of the standard to your company. Speculation has been from no impact at all to the world is going to be entirely different post implementation. As always, the reality is somewhere in the middle. Generally speaking, for the government contracting industry, the end result of when and how much revenue is recognized will be similar as in the past or at least should not significantly. Read More.

Topics: , , , , , , ,

The Auditor Strikes Back: Always a Bonus of Contention

As we reported in October, the Defense Contract Audit Agency (“DCAA”) Contract Audit Manual (“CAM”) was recently updated. One of the 13 areas of cost updated related to bonus and incentive compensation costs. This topic is covered in Chapter 7 of both the previous version and new version of the CAM. Bonuses and incentive compensation can mean many things including cash, stock, stock options, stock appreciation rights, phantom stock plans, and/or a combination of the aforementioned forms. Bonus and incentive compensation can also be paid in the short/current term or in the future/long term. These plans can differ greatly between contractors and. Read More.

Topics: , , , , , , ,

How Many Contractors Does It Take to Run the Government?

By: John Ford , Senior Consultant, Government Contractor Services Group For many years, there has been a debate as to how many contractors are performing work for the government. This issue has two components: (1) the number of entities holding contracts; and (2) the number of individuals who are actually performing those contracts. While the former is fairly easy to determine, the latter is more problematic. This article will discuss two of the tools available to the government to make this determination. These tools also help the government to know how much these employees are costing the government. The first tool, required. Read More.

Topics: , , , , , , ,

If the Government Claims a Refund, When did the “Claims Clock” Start Running?

By: David Lundsten , Partner, Government Contractor Services Group and John Ford , Senior Consultant, Government Contractor Services Group The Contract Disputes Act (“CDA”) requires a contract claim by either party (the government or the contractor) to be submitted within six years after accrual of the claim. This six-year “claims clock” is otherwise known as the CDA Statute of Limitations (“SOL”). The CDA does not state the test for determining when a claim accrues. However, the Federal Acquisition Regulation (“FAR”) has filled this gap at FAR 33.201, which states that a claim accrues when “all events, that fix the alleged liability . . .. Read More.

Topics: , , , , ,

Auditor Strikes Back: Appreciating Depreciation

The Selected Areas of Cost guidebook replaces Chapter 7 of the Defense Contract Audit Agency (“DCAA”) Contract Audit Manual (“CAM”). One of the 13 sections that have been rewritten and updated covers depreciation. Below we will take a deep dive into some of the new updates. When a contractor typically owns tangible personal property which provides services for a number of years, that cost is recorded as an asset (rather than expense) in the year the asset is acquired. According to the matching principle, a portion of the asset should be reported as an expense during each period of the. Read More.

Topics: , , , , , ,