An important milestone for government contractors and particularly to negotiated contracts is an adequate cost accounting system. Further, in today’s contracting environment having an adequate accounting system can be a pre-requisite for contracts. Today many Requests For Proposals (RFP) require it.
The need for a compliant accounting system depends on the contractor’s circumstances and contract types. For instance negotiated fixed price contracts do not require an adequate accounting system, only that the cost or pricing data submitted meets the cost or pricing data requirements. These requirements are defined by FAR 15.4. The accounting system should report certain financial data to support the cost or pricing data requirements under fixed price contracts such as indirect cost rate data. An adequate accounting system subject to DCAA preferences is most relevant to cost reimbursable contracts. Under cost reimbursable contracts the accounting system must be adequate and approved by the government under FAR Subpart 16.3. Securing approval is a significant accomplishment in this industry. In some cases the government requires an adequate accounting system under time and material contracts as well on a case by case basis.
To gain approval normally an audit is conducted by DCAA. Now, DCAA will not conduct this audit simply because the contractor wants an approved system. DCAA conducts audits on behalf of procurement agencies at their request. Contracting officers request DCAA perform these audits when there is a government need. So the first thing to do is get government sponsorship. This government agency can request the audit. This request is normally associated with an open RFP or contract.
What Does It Take to Get Approval?
For non-major contractors, I refer to twelve (12) key elements that you must pass. These are must haves, no exceptions, to secure approval for cost reimbursable contracts. Below not only have I listed the 12 key elements, but I have also elaborated on what these 11 items mean to prepare the contractor for its approved DCAA cost accounting system. In order for an accounting system to be approved, it must demonstrate the ability to meet these 12 key elements.
Complete the form below to receive a copy of the 12 Key Elements to pass a DCAA approval of your accountng system. No Obligation.
Please send me the 12 Key Elements required for a DCAA / Government approval of my accounting system. Upon completion of the form, you will be redirected to the results page. This page is protected, however you will receive the access code in the email provided below, as well as a plain text version of the information. Thank you for your interest in government approved accounting systems. Please contact us for further information.