CPAs and Advisors with Your Growth in Mind

Auditor Strikes Back: The Proof is in the Pudding – Defending Professional & Consultant Services Cost

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 the allowability of professional & consultant costs. This topic is covered in Chapter 7 of both the previous version and new version of the CAM. The new guidance provides more insight into the evidence required to defend the costs incurred by the contractor. The evidence required by DCAA is to help prove the true nature of the professional services costs and clear up any “gray area” or concerns. Specifically, the guidance states contractors need. Read More.

Topics: , ,

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: , , , , , , ,

If the Government Claims a Refund, When did the “Claims Clock” Start Running?

By: David Lundsten , Partner, Government Contractor Services Group and John Ford , Senior Consultant, Government Contractor Services Group The Contract Disputes Act (“CDA”) requires a contract claim by either party (the government or the contractor) to be submitted within six years after accrual of the claim. This six-year “claims clock” is otherwise known as the CDA Statute of Limitations (“SOL”). The CDA does not state the test for determining when a claim accrues. However, the Federal Acquisition Regulation (“FAR”) has filled this gap at FAR 33.201, which states that a claim accrues when “all events, that fix the alleged liability . . .. Read More.

Topics: , , , , ,

Auditor Strikes Back: Appreciating Depreciation

The Selected Areas of Cost guidebook replaces Chapter 7 of the Defense Contract Audit Agency (“DCAA”) Contract Audit Manual (“CAM”). One of the 13 sections that have been rewritten and updated covers depreciation. Below we will take a deep dive into some of the new updates. When a contractor typically owns tangible personal property which provides services for a number of years, that cost is recorded as an asset (rather than expense) in the year the asset is acquired. According to the matching principle, a portion of the asset should be reported as an expense during each period of the. 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: , ,