CPAs and Advisors with Your Growth in Mind

Can Contractors Rely on Previous DCAA Audit Findings?

By: John Ford , Senior Consultant, Government Contractor Services Group One of the more frustrating things that contractors face is Defense Contract Audit Agency (“DCAA”) auditors changing their minds about the allowability of costs. This is particularly troublesome if the contractor has been including the cost in its indirect cost pools for years without DCAA questioning the allowability of the cost, then, without warning, DCAA questions the cost and alleges that the cost is expressly unallowable. Compounding this is the fact that the claim by DCAA is asserted several years after the cost was incurred. In the meantime, the contractor has included. Read More.

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The Auditor Strikes Back: Updated Cost Allowability Guidance Published by DCAA

During late summer, the Defense Contract Audit Agency (“DCAA”) published a “Selected Areas of Cost” guidebook to replace Chapter 7 of the DCAA Contract Audit Manual (“CAM”). The newly refreshed guidebook provides further direction for auditors and contractors on how to properly treat certain types of costs listed in Federal Acquisition Regulation (“FAR”) 31.2 regarding allowability. Specifically, an unlucky 13 areas of costs have been updated with additional guidance. Those costs include: Bonus and Incentive Compensation Joint Ventures and Teaming Arrangements Depreciation Insurance IR&D/B&P Idle Facilities and Idle Capacity Legal Patents Royalties Consultants Pensions Alcoholic Beverages Manufacturing and Production Engineering. Read More.

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