Revised Treatment of Incomplete or Inadequate Prime Contractor Cost
The Defense Contract Audit Agency (“DCAA”) issued revised guidance on the treatment of incomplete or inadequate prime or higher-tier (hereinafter referred to as “prime”) contractor cost or price analyses during a forward pricing proposal audit. This new guidance, effective immediately, cancels the previous guidance established in 2009 and in 2017. Federal Acquisition Regulation (“FAR”) 15.404-3(b) requires the prime or higher-tier contractor to conduct cost or pricing analyses to establish reasonableness of the proposed subcontractor costs. Under the previous guidance, if the prime contractor did not complete and submit the required subcontractor cost or price analyses with its own proposal, DCAA classified. Read More.
It’s Almost That Time Again…. How to Get a Head Start on your Annual Incurred Cost Submission
By: Eric Poppe, Senior Manager and Javier Diaz, Manager It’s that time of year. Year-end financial statement audits are going on, you are working with your accountant on your tax returns hoping to complete on time, and just around the corner, you are required to submit your Incurred Cost Submission (“ICS”). Is there time to breathe? As we know, for companies with a fiscal year ending December 31, 2017, the 2017 ICS will be due by June 30, 2018, six months after the close of that fiscal year. The determining factor which requires companies to submit an ICS is the Federal Acquisition Regulation (“FAR”). Read More.
DCAA 2018 Hot Button Highlights
By: Curt Smith , Manager Each year Cherry Bekaert addresses topics that effect the Defense Contract Audit Agency (“DCAA”) in our DCAA “Hot Buttons” webinar. A summary of the January 17, 2018, webinar is presented here. The webinar is replay is also available on our YouTube channel. The webinar is available for replay on our YouTube channel. Section 803 of the 2018 National Defense Authorization Act (“NDAA”) Section 803 of the 2018 NDAA contains several provisions reforming defense contract auditing. Perhaps the provision with the greatest impact on DCAA directs the Department of Defense (“DoD”) to begin using private auditors to perform incurred cost audits to reduce the current backlog. The provision intends to focus DCAA resources on forward-pricing audits, which are considered. Read More.
Topics: Cost Accounting Standards "CAS", DCAA, DCAA Audits, DCAA Memorandums for Regional Directors, Defense Contract Audit Agency "DCAA", Department of Defense "DoD", Federal Acquisition Regulation "FAR", Generally Accepted Government Auditing Standards "GAGAS", Incurred Costs, National Defense Authorization Act "NDAA"
#MeToo and Federal Contractors
By: John Ford, Senior Consultant Most of us have probably heard of the misconduct allegations made recently against high profile individuals in the media, entertainment industry, and Congress. Many of these allegations involve violations of Title VII of the Civil Rights Act of 1964 (“CRA”), while others may involve allegations of civil or criminal violations such as battery or even rape. While probably not as likely to make the headlines like the recent widely publicized cases, contractors can face many of these problems. This article will provide a high-level overview of some of the contracting issues contractors can face if their employees. Read More.
DODIG Report on DCMA Actions Regarding DCAA Incurred Cost Audit Reports
In a recent report from the Department of Defense Office of Inspector General (“DODIG”) (DODIG-2017-055, dated February 9, 2017) the DODIG found several instances when the Defense Contract Management Agency (“DCMA”) contracting officer’s (“CO”) actions did not comply with Federal Acquisition Regulation (“FAR”), DoD Instruction 7640.02, or DCMA instructions. The findings resulted from a review of 22 incurred cost reports judgmentally selected from a pool of 1,072 Defense Contract Audit Agency (“DCAA”) incurred cost reports issued between September 2013 and July 2015. In its review, the DODIG evaluated the appropriateness of DCMA actions on DCAA findings reported in the 22. Read More.
Topics: contracting officers, Defense Contract Audit Agency "DCAA", Defense Contract Management Agency "DCMA", Department of Defense Office of Inspector General, DoD Contract Audit Follow-up System, Federal Acquisition Regulation "FAR", Incurred Costs
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.