Unbilled Accounts Receivable: Real or Imagined Assets?
Unbilled accounts receivable (A/R) represents recorded revenue that has not yet been billed on a contract. There can be many different reasons for having unbilled A/R recorded on the balance sheet (B/S). Government contractors with cost reimbursable contracts tend to have greater unbilled accounts that stay on the B/S longer. The most common reasons for unbilled A/R are the following: Timing differences: These can exist due to the normal timeframe of processing employee timesheets and invoices through the accounting system. These amounts should be billed as soon as possible in accordance with contractual terms. Rate variances: These can exist when. Read More.
DCAA Issues Guidance on Dealing with Delinquent Final Indirect Cost Rate Proposals
On February 3, 2014, the Defense Contract Audit Agency (“DCAA”) issued Memorandum for Regional Directors (MRD) 14-PPD-002(R), entitled, Treatment of Delinquent Final Indirect Rate Proposals. As indicated by the title, the guidance addresses steps DCAA and the Defense Contract Management Agency (“DCMA”) will take when a contractor does not submit its final indirect cost rate proposal on time. Before discussing the MRD, some background information on submission of final indirect cost rate proposals is in order. Contrary to the belief of some DCAA auditors, contractors do not have an inherent duty to establish final indirect cost rates. Instead, contractors are. Read More.
Topics: Allowable Cost and Payment, Audit, Defense Contract Audit Agency "DCAA", Defense Contract Management Agency "DCMA", Defense Federal Acquisition Regulation Supplement, Federal Acquisition Regulation "FAR", Government Contracting, Indirect Cost Rates, Memorandum for Regional Directors "MRD"
Four MRDs issued by DCAA in June 2014
In June, the Defense Contract Audit Agency (“DCAA”) issued four Memoranda for Regional Directors (MRDs) that can be of interest to contractors. Two of the MRDs related to conducting audits under the Defense Federal Acquisition Regulation Supplement (DFARS) business systems rule. The first is MRD 14-PAS-009(R) Audit Guidance on Reporting Business Systems Deficiencies , (June 26, 2014). The primary objective of this MRD was to provide clarifying guidance on how to report shortcomings in a business system that do not rise to the level of a significant deficiency, as defined in the relevant business systems clause. Under the various business systems clauses, a distinct definition is provided of what. Read More.
GSA Cutting Non-Compliant Vendors from Contract Schedules
With an ever-tightening budget, the General Services Administration (“GSA”) is continuously looking for cost-saving measures. Its latest means of cutting costs involves removing non-compliant vendors from the GSA schedule contracts. The most recent GSA schedule contract to be reviewed was the Information Technology (IT) Schedule, Schedule 70. In 2012, GSA announced that it would begin reviewing its procedures for granting contracts or renewing contracts for schedule holders, as well as begin moving to a demand-based model, where schedules that are oversaturated with vendors would be closed to new companies, or outdated special item numbers (SIN) would be removed. The hope. Read More.
Landscape or “Minescape” for Potential Mergers with Government Contractors
As we work with potential acquirers of government contractors, it sometimes feels like we are holding hands and walking through a minefield. Last year’s government budget landscape was full of potential mines just waiting for us to make a wrong step and boom! Sequestration cuts, occasional insourcing of positions, government shutdown, procurements shifting to Lowest Priced Technically Acceptable solicitations, and other potential “landmines” all collided to make buyers very wary about investing their capital in the government contractor market. The mergers and acquisitions (M&A) market for government contractors has changed dramatically in the past two years, and appears to be. Read More.
DCAA Issues new Guidance on Establishment of Provisional Billing Rates
On June 27, 2014, the Defense Contract Audit Agency (“DCAA”) issued Memorandum for Regional Directors (“MRD”) 14-PPS-012(R) Guidance on Establishing Provisional Billing Rates . The new guidance is effective October 1, 2014, but early implementation is encouraged. This new guidance should help to ease issues that have arisen between DCAA and contractors regarding a contractor’s obligation to submit a proposal to establish billing rates. In the past, some of our clients have had DCAA auditors cite them for having deficient accounting systems because the contractor did not submit a “timely” proposal to establish billing rates. This was inappropriate because there is no specific requirement in the FAR for a contractor to submit. Read More.