DCAA Audit, FAR and Government Contract Consulting

NEED HELP WITH:

DCAA, FAR, CAS and Other Regulations
Government Contract Accounting Systems
Indirect Rates and Incurred Cost Submissions
Government Contract Proposals
Equitable Adjustments or Claims
Or Just Want to Understand the Rules of the Game?

BECAUSE THIS IS WHAT I DO!

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I am a DCAA/Government contract consultant with 25 years top shelf experience specializing in DCAA, the Federal Acquisition Regulation (FAR) and the Cost Accounting Standards (CAS). I have been serving government contractors since 1986. The scope of my services includes all subjects involving the DCAA, the FAR and government contracting in general. My expertise encompasses practically any industry including all forms of government contracts such as firm fixed price, cost reimbursable, time and material, IDIQ incentive fee, award fee and all the contract type possibilities. Most common projects I perform include the following subjects:

Accounting system assessments
Compliance and cost recovery assessments
DCAA audits
Indirect rates, forward pricing and incurred cost submissions
FAR assessments and interpretations
Government contract proposals/GSA schedule proposals
Compliant systems, procedures and processes
Cost Accounting Standards (CAS)
Equitable adjustments, terminations, claims, etc.

I have expertise in the most notable government contracting accounting systems, such as Deltek GCS and Costpoint. However, I am not a "super-user". But I know the systems very well. For small businesses I have experience with Quick Books. I implement this system in a manner that is DCAA compliant with add-on features.

I particularly like working with small and medium sized businesses helping them win contracts, overcome DCAA requirements and challenges, maximize cost recovery and cash flow.

I work with large businesses as well offering an expert resource.

DCAA/Government Contracting Experience

My 25 years government contracting experience includes working as a decorated senior auditor for DCAA. It also includes a long tenure as a Manager for KPMG, a large public accounting and consulting firm (aka KPMG) in its government contracting consulting practice. In this role I helped clients resolve DCAA and government contracting challenges. I also worked for many years in management positions for government contractors as a CFO, Controller and Contracts Manager. This vast experience provides me the expertise to provide comprehensive solutions to government contracting challenges taking into account the government's regulatory oversight role and the contractor's objectives.

It is impossible to describe these 25 years of experience in DCAA and government contracting in a few paragraphs. So please view the links or contact me for more detail.

If you have a government contracting problem, I most likely have a viable solution.

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CONTACT

Edward D. Moore

Principal Consultant

T: 336-880-9040

E: emoore@dcaaconsulting.com

W: www.dcaaconsulting.com

February 8, 2010

DCAA Provided Guidance on Indirect Cost Limit For Research Projects

This is an information post. DCAA on December 10, 2009 provided direction and audit guidance to its auditors to determine compliance with the 2009 Appropriations Act. This Act limits indirect costs on DoD research grants and other contract vehicles. The limit is 35% of total costs. DCAA has instructed its auditors to verify compliance with this requirement and to audit the contractor's internal controls regarding this compliance requirement.

Contractors should keep this in mind understand its indirect costs invoicing will be to limited to this cap and make adjustments in its billing procedures to not exceed this limitation. Should you have questions on this or been requested by DCAA to demonstrate your system meets this requirement please contact me.

Mon, February 8, 2010 | link

September 28, 2009

DCAA Targets Compensation Again

Recently I received information confirming that DCAA is applying a full court press on a number of subjects. One is compensation. For small and medium sized businesses this means owner and partner compensation. The DCAA will be looking closer at these costs to make sure they meet the requirements of FAR 31.205-6. The costs to participate and run the business are generally allowable if considered reasonable by the government. The DCAA is using various compensation surveys to validate reasonableness. Government perceptions that a cost is actually a distribution of profits is not allowable. Also bonuses if reasonable are allowable. However, these bonuses must be documented in policy or a plan implying an agreement or actual agreement with the employee or member or partner. Discretionary plans versus performance based plans will not fly. Obviously this all gets a bit complicated for partnerships and LLC's. My suggestion is (1) document compensation with plans, policies and agreements; (2) bounce your compensation off of at least three compensation surveys that are relevant, unbiased and reputable so you are prepared for DCAA and make adjustments as needed; (3) avoid discretionary compensation practices and (4) develop a strategy for owner and partner compensation.

Mon, September 28, 2009 | link

August 4, 2009

DCAA Revises Guidance

Recently the DCAA has revised its guidance to its auditors significantly. One such change is how they assess accounting systems. Now auditors are supposedly limited to a pass/fail evaluation. In the past auditors had the flexibility to `consider materiality, and contractor actions in making an assessment. This guidance was presumed to be focused on the major contractors, but I had suspicions that it would flow down to small contractors. Recently I have witnessed that this change in guidance is now impacting small and medium sized businesses as auditors appear inflexible in their evaluations. I have successfully raised the issue up the chain of command and have negotiated with contracting officers in some cases.

Bottom line is this, auditors will be more indifferent to materiality and contractors will need to enhance their systems to minimize the effect these changes will have. This will include internal controls and documented procedures.

Tue, August 4, 2009 | link

June 24, 2009

Allowable Rental Costs

Recently, DCAA was taking exception to rental costs of a small business contractor, claiming the cost was a related party transaction as an owner was the lessor or leasing the facility to the contractor. Truth was the lessor was a minority (less than 50% owner). DCAA claimed that since the owner of the building was also an owner of the the company it qualified as a related party transaction and that the FAR limited allowable costs to ownership costs, depreciation, insurance, taxes and insurance. This was a large disallowance to the contractor.

Well, the truth is, that is not what the FAR says. The FAR (FAR 31-205-36) states allowable costs are limited to ownership costs provided the there is "common control" between the contractor owner and the building owner. The DCAA's own audit guidance states the same concept. Well there was not any common ownership. the primary or majority owner of the contractor did not have any ownership in the building and the owner of the building was a minority (less than 50% ownership) in the contractor. So in this case the allowable costs were not limited to ownership costs. The full value of rental costs, provided they were reasonable, was allowable.

We prevailed on the issue and the contract in question was re-negotiated to the contractor's satisfaction.

This situation is common in small businesses. I advise against it for this very reason, DCAA questioning costs without getting all the facts and not applying the regulations or their own audit guidance properly. Best not to open the door to the possibility of questioned costs. But if you are in this situation, just keep in mind the limitation on allowable costs (the ownership cost rule) only applies where there is common control between organizations.

Wed, June 24, 2009 | link

2010.02.01 | 2009.09.01 | 2009.08.01 | 2009.06.01