CPAs and Advisors with Your Growth in Mind

ASBCA Holds that Leases are not Necessarily Subject to CAS 404

In Exelis, Inc., ASBCA No. 60131 (29 Aug. 2016), the Armed Services Board of Contract Appeals (“ASBCA”) held that a concern whether a building lease was a capital lease or an operating lease is not subject to Cost Accounting Standards (“CAS”) 404. In 2007, the Defense Contract Audit Agency (“DCAA”) released its audit of Exelis’ 2004 final indirect cost rates. DCAA questioned Exelis’ lease costs, finding that the building lease was a capital lease instead of an operating lease as claimed by Exelis and that Exelis could only include building depreciation in its indirect cost pool rather than the entire. Read More.

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Preparing a Compliant Proposal: An Art or a Science?

By: Kristen Kwiatkowski, Manager; and Eric Poppe, Manager Preparing a technical and cost proposal for any company can be a daunting task. Not only do you need to prove that you have the services or products the customer needs, but you need to prove you can provide them better than your competitors, at the best price, and still make your company a profit. Layer in the complexities of government contracting, and you have an intricate dance that many spend their whole careers trying to master. In addition to fighting your own challenges on preparing a compliant proposal, you may also. Read More.

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DCAA Issues Guidance on Dealing with Delinquent Final Indirect Cost Rate Proposals

On February 3, 2014, the Defense Contract Audit Agency (“DCAA”) issued Memorandum for Regional Directors (MRD) 14-PPD-002(R), entitled, Treatment of Delinquent Final Indirect Rate Proposals. As indicated by the title, the guidance addresses steps DCAA and the Defense Contract Management Agency (“DCMA”) will take when a contractor does not submit its final indirect cost rate proposal on time. Before discussing the MRD, some background information on submission of final indirect cost rate proposals is in order. Contrary to the belief of some DCAA auditors, contractors do not have an inherent duty to establish final indirect cost rates. Instead, contractors are. Read More.

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