CPAs and Advisors with Your Growth in Mind

DoD Inspector General Issues Two Reports on DCAA Quality Control

On August 27, 2014, the Defense Contract Audit Agency (“DCAA”) issued Memorandum for Regional Directors (MRD) 14-PAS-014(R) , captioned ”Audit Guidance on Removal of Modified GAGAS Statement in Audit Reports”. As background for this MRD, Generally Accepted Government Auditing Standards (GAGAS) require audit organizations to obtain an external peer review at least once every three years. For DCAA, the external reviews are performed by the Department of Defense’s (“DoD”) Inspector General. In August 2009, the Inspector General revoked its previous approval of DCAA’s quality control program. As a consequence, since August 2009, DCAA has been unable to state that it performed its audits in accordance with. Read More.

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Significant Proposed Changes to DFARS Business System Monitoring Requirements

On July 15, 2014, the Department of Defense (“DoD”) issued a proposed rule to amend the Defense Federal Acquisition Regulation Supplement (DFARS) on government contractor business system requirements. The comment period for the proposed change ended on September 15, 2014. The proposed rule requires that contractors begin annual self-evaluations and reporting on their accounting system, material management and accounting system (MMAS), and estimating system, for those contractors required to maintain approved systems in accordance with the DFARS business system requirements. In addition, a Certified Public Accountant (CPA) audit is required to be performed by an independent firm of the contractor’s. Read More.

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Rule Updated on Whistleblower-Related Legal Costs

In June 2013, Cherry Bekaert notified you of coming changes to whistleblower protection laws for government contractors. Subcontractors were being given protection under whistleblower laws, and the Federal Acquisition Regulation (FAR) was amended at that time to generally not allow legal fees or other expenses related to whistleblower protection claims. This past July, multiple government agencies, the Department of Defense (“DoD”), General Services Administration (“GSA”), and National Aeronautics and Space Administration (“NASA”), finalized a rule to update FAR cost principle 31.205-47, related to the allowability of legal costs. The change implements a section of the National Defense Authorization Act 2013. Read More.

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Changes to ALL Compensation for Government Contractors

As part of the 2013 Bipartisan Budget Act, Congress reduced the contractor and subcontractor compensation cap from $952,308 to $487,000, a 49 percent reduction. The cap will be adjusted annually to reflect the change in the Employment Cost Index for all workers as calculated by the Bureau of Labor Statistics. As always, contractors can pay whatever amounts they deem appropriate, but the government will only reimburse (at the most) to the cap. Previously, Congress, in the 2012 National Defense Authorization Act, applied the ceiling on reimbursable pay to all Department of Defense (“DoD”), Coast Guard, and National Aeronautics and Space. Read More.

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New DoD Requirement to Perform its own Price Reasonableness Determination

On March 13th of this year, the Office of the Under Secretary of Defense for Acquisition Technology and Logistics issued a memorandum directing contracting officers to comply with a deviation from the Federal Acquisition Regulation (“FAR”) 8.404(d). The class deviation is applicable to Department of Defense (“DoD”) entities buying off Schedule contracts and remains in effect until the language is incorporated into the Defense Federal Acquisition Regulation Supplement. This deviation provides that “GSA has determined the prices of supplies and fixed-price services, and rates for services offered at hourly rates, to be fair and reasonable for the purpose of establishing. Read More.

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