CPAs and Advisors with Your Growth in Mind

The Auditor Strikes Back: Always a Bonus of Contention

As we reported in October, the Defense Contract Audit Agency (“DCAA”) Contract Audit Manual (“CAM”) was recently updated. One of the 13 areas of cost updated related to bonus and incentive compensation costs. This topic is covered in Chapter 7 of both the previous version and new version of the CAM. Bonuses and incentive compensation can mean many things including cash, stock, stock options, stock appreciation rights, phantom stock plans, and/or a combination of the aforementioned forms. Bonus and incentive compensation can also be paid in the short/current term or in the future/long term. These plans can differ greatly between contractors and. Read More.

Topics: , , , , , , ,

Required Documentation in Support of Consultant Costs

By: Curt Smith, Manager, Government Contractor Services Group The allowability of consultant costs is sometimes a point of contention between contractors and Defense Contract Audit Agency (“DCAA”) auditors, and often the issue is insufficient documentation. What evidence is required by the Federal Acquisition Regulation (“FAR”) to document consultant costs sufficiently and how do auditors determine allowability given this requirement? A quick review of FAR and guidance for DCAA auditors concerning consultant costs will greatly help answer these questions. The general parameters of allowability for consultant costs are described in FAR 31.205-33 — Professional and Consultant Service Costs. However, other cost. Read More.

Topics: , , , ,

Auditor Strikes Back: Never an Idle Moment for Idle Facilities

As we reported in October, the Defense Contract Audit Agency (“DCAA”) Contract Audit Manual (“CAM”) was recently updated . One of the 13 areas of cost updated related to idle facilities. This topic is covered in Chapter 32 of the new Selected Areas of Cost Guidebook. The guidance related to idle facilities is mostly unchanged with respect to Federal Acquisition Regulation 31.2015-17(a); however, a few points were called out in the DCAA guidance. Indicators of when facilities may be considered idle are: The facility is completely unused. No current need is foreseen or can be demonstrated for the completely unused facility. The facility and/or equipment have been excluded from regularly scheduled maintenance. Read More.

Topics: , , , ,

Auditor Strikes Back: No Changes to Alcohol Allowability Guidance

As we reported in October, the Defense Contract Audit Agency (“DCAA”) Contract Audit Manual (“CAM”) was recently updated. One of the thirteen areas of cost updated related to alcoholic beverages. This topic is covered in Chapter 2 of the new Selected Areas of Cost Guidebook. The revised guidance has not reflected a change in position by DCAA or the Federal Acquisition Regulation with respect to allowability on alcoholic beverages. The guidebook has added a frequently asked question related to whether alcoholic beverages are unallowable for nonprofit entities. The short (and long) answer is yes, alcoholic beverages are expressly unallowable in accordance with. Read More.

Topics: , ,

The Auditor Strikes Back: Patent Costs Get an Update

As we reported in October, the Defense Contract Audit Agency (“DCAA”) Contract Audit Manual (“CAM”) was recently updated. One of the thirteen areas of cost updated related to patent costs. This topic is covered in Chapter 52 of the CAM, with the new version being separated into three key topics: 52-1, Allowability of Patent Costs 52-2, Patent Rights – Ownership by the Contractor and the Allowability of Associated Patent Costs 52-3, Special Requirements for Nonprofit Organizations Previously, the DCAA CAM addressed patent costs in Chapter 7-700, which was less than three pages in length on treatment of patent costs for allowability purposes. The. Read More.

Topics: , ,

Department of Defense Continues to Tinker with the Allowability of IR&D

Beginning in 2011, the Department of Defense (“DoD”) began making changes to the supplemental cost principle on Independent Research and Development (IR&D) found at the Defense Federal Acquisition Supplement (DFARS) 231.205-18. These changes have not affected the definition of IR&D found at Federal Acquisition Regulation 31.205-18. Instead, they have addressed what certain contractors must do in order for their IR&D costs to be allowable on government contracts. The latest proposed change in the allowability requirements set forth in the DFARS was published in the Federal Register on February 16, 2016 . The proposed change reformats the existing DFARS 231.205-18(c)(iii)(C) and adds a new requirement that reads: For IR&D projects. Read More.

Topics: , , , , , ,