CPAs and Advisors with Your Growth in Mind

Subcontractor Oversight (Who’s Responsible?)

By: John N. Ford, JD ; Senior Consultant  Who has privity? 42.505 – Post-award Subcontractor Conferences (a) The prime contractor is generally responsible for conducting post-award conferences with subcontractors. However, the prime contractor may invite Government representatives to a conference with subcontractors, or the Government may request that the prime contractor initiate a conference with subcontractors. The prime contractor should ensure that representatives from involved contract administration offices are invited. (b) Government representatives– (1) Must recognize the lack of privity of contract between the Government and subcontractors; (2) Shall not take action that is inconsistent with or alters subcontracts; and (3) Shall ensure that. Read More.

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Audit Alert Issued for DCMA Implementation Guidance on Blended Compensation Caps

On February 19, 2016, the Defense Contract Audit Agency (“DCAA”) issued Memorandum for Regional Directors (“MRD”) 16-PSP-005(R), Audit Alert on DCMA Implementation Guidance on Blended Compensation Caps. The Alert provides auditors with official guidance when dealing with blended compensation caps with contractors, and in tandem with the Defense Contract Management Agency (“DCMA”). What does this mean? Let’s take a few steps back to October 2014, when Shay Assad, the Director of Defense Pricing Acquisition Technology, and Logistics OUSD (“AT&L”), issued a memo stating that use of a blended rate is deemed “practical and cost efficient.” This was in reaction to. Read More.

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Accounting for Overtime

Recently, our Firm presented a webinar on overtime . Because of time limitations, we were not able to address the proper accounting treatment of overtime costs. This blog will fill this gap. For purposes of this blog, overtime costs are those additional costs a contractor incurs to compensate an employee for working more than 40 hours in a workweek. The hours may be compensated at the employee’s normal hourly rate or at a premium rate of pay. We are not concerned with uncompensated overtime here. There seems to be some confusion and disagreement over the proper accounting treatment for overtime costs. For instance,. Read More.

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