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.
Auditor Strikes Back: Never an Idle Moment for Idle Facilities
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 idle facilities. This topic is covered in Chapter 32 of the new Selected Areas of Cost Guidebook. The guidance related to idle facilities is mostly unchanged with respect to Federal Acquisition Regulation 31.2015-17(a); however, a few points were called out in the DCAA guidance. Indicators of when facilities may be considered idle are: The facility is completely unused. No current need is foreseen or can be demonstrated for the completely unused facility. The facility and/or equipment have been excluded from regularly scheduled maintenance. Read More.
ASBCA Holds that Leases are not Necessarily Subject to CAS 404
In Exelis, Inc., ASBCA No. 60131 (29 Aug. 2016), the Armed Services Board of Contract Appeals (“ASBCA”) held that a concern whether a building lease was a capital lease or an operating lease is not subject to Cost Accounting Standards (“CAS”) 404. In 2007, the Defense Contract Audit Agency (“DCAA”) released its audit of Exelis’ 2004 final indirect cost rates. DCAA questioned Exelis’ lease costs, finding that the building lease was a capital lease instead of an operating lease as claimed by Exelis and that Exelis could only include building depreciation in its indirect cost pool rather than the entire. Read More.
Topics: Armed Services Board of Contract Appeals "ASBCA", Cost Accounting Standards "CAS", Defense Contract Audit Agency "DCAA", Defense Contract Management Agency "DCMA", Federal Acquisition Regulation "FAR", GAAP, Indirect Cost Rates, leases
GAO Denies Bid Protest
The Government Accountability Office (“GAO”) has denied a bid protest challenging the agency’s evaluation of the protester’s proposal as unacceptable because the protester did not demonstrate that it had an accounting system that had been approved by the Defense Contract Audit Agency (“DCAA”). The National Security Agency (“NSA”) issued a small business set aside Request for Proposal for business, engineering, information technology, operations, and training support services. One of the evaluation subfactors was that offerors have an accounting system “that has been deemed acceptable for award by a [Defense Contract Audit Agency (DCAA)] audit at the time of proposal submission. Read More.
Proposed Rule: Opening the Dialogue for Government and Industry to Play Friendly
On November 29, 2016, the Department of Defense, General Services Administration, and National Aeronautics and Space Administration proposed an amendment to the Federal Acquisition Regulation (“FAR”). The purpose of this amendment is to clear misconceptions regarding the responsibilities of communication between government and industry during the acquisition process. By adding more explicit language to the FAR, the agencies involved hope to create more effective communication between government and industry. So what is the potential impact on regulation? FAR part 1.102-2 dictates the “performance standards” placed on private industry in the acquisition process. This rule proposes to amend FAR 1.102-2(a)(4) of. Read More.
Auditor Strikes Back: No Changes to Alcohol Allowability Guidance
As we reported in October, the Defense Contract Audit Agency (“DCAA”) Contract Audit Manual (“CAM”) was recently updated. One of the thirteen areas of cost updated related to alcoholic beverages. This topic is covered in Chapter 2 of the new Selected Areas of Cost Guidebook. The revised guidance has not reflected a change in position by DCAA or the Federal Acquisition Regulation with respect to allowability on alcoholic beverages. The guidebook has added a frequently asked question related to whether alcoholic beverages are unallowable for nonprofit entities. The short (and long) answer is yes, alcoholic beverages are expressly unallowable in accordance with. Read More.