CPAs and Advisors with Your Growth in Mind

Use of Cost Realism in Proposal Evaluations

By: Curt Smith, Manager, Government Contractor Services Group When negotiating a contract price, the primary concern of contracting officers (“CO’s”) should be the price that the government will pay to obtain the required supplies or services from a responsible contractor. Their objective should be to negotiate a contract type and price (or estimated fee and cost) that will result in reasonable contractor risk and provide the contractor with the greatest incentive for efficient and economical contract performance. To achieve this goal, the Federal Acquisition Regulation (“FAR”) requires agencies to establish a negotiating objective based upon a price or cost analysis.. Read More.

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GAO Calls for Improved Grant Monitoring Oversight

According to a study of 75 discretionary grant programs, the U.S. Government Accountability Office (“GAO”) has concluded that the Department of Education grant staff failed to effectively monitor grantee performance. The GAO found that inconsistent grant monitoring has led to around $21 million in discretionary grant funds lacking proper documentation. In particular, 69 of the 75 grants studied were missing key documents such as annual performance reports. As a result of its findings, the Department of Education has agreed to the GAO’s recommendations of implementing detailed written supervisory review procedures and establishing guidance on using the Post-Award Monitoring module. More on the discretionary grants review is available on GAO.gov.

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GAO Seeks Feedback on Proposed Yellow Book Changes

The U.S. Government Accountability Office (“GAO”) is seeking comments on its proposed revisions to Government Auditing Standards (“Yellow Book”). The exposure draft offers major changes to the 2011 Yellow Book including chapter reorganization, providing additional details on the auditor’s requirements when the engaging party is different from the responsible party, and an update to the internal control requirements and guidance. Comments on the proposed Yellow Book changes are due Thursday, July 6. More on the proposed amendments to the Yellow Book is available on GAO.gov.

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SEC Called Out for Lack of Staff Oversight

A report by the Government Accountability Office (“GAO”) says the Securities and Exchange Commission (“SEC”) has made limited progress on improving oversight of the agency’s staff. Published on December 29, the report notes that the SEC continues to provide insufficient management of staff members and has yet to develop procedures for reviewing performance, improving collaboration efforts, and regularly assessing progress made. The SEC’s Division of Corporation Finance received some of the blame for not giving supervisors expectations in how to resolve workplace problems and train employees.

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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.

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SEC Improves Internal Controls

According to a recent Government Accountability Office (“GAO”) report, the Securities and Exchange Commission’s (“SEC”) internal controls are improving. In fiscal 2015, only six of the SEC’s 58 internal supervisory controls tested had deficiencies. Comparative to the GAO’s 2013 review, the six deficiencies mark a significant reduction from the 27 flaws identified in fiscal 2011. The GAO noted that none of the flaws are likely to inhibit the SEC from ensuring their divisions and offices carry out actions accordingly. Specifically, the watchdog agency found two flaws without clear control activities, three that showed a major element did not align with. Read More.

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