Incurred Cost Submissions (ICE)
speaking contractors executing cost reimbursable type contracts subject to the Allowable Cost and Payment Clause are required
to submit an Incurred Cost Submission. Some prime contractors also invoke this requirement on time and material contracts
as well. The submission requirements are significant and a burden, especially to small businesses. Liability can also
attach for penalties for including unallowable costs. Making a compliant and adequate submission is important to success.
The incurred cost submission should be made within six months after the close of the contractor's
fiscal year or calendar year. If this due date cannot be met it
is a good idea to request the contracting officer provide an extension of time. The submission must meet DCAA requirements
and their adequacy review. The DCAA prefers the use of its Incurred Cost Electronically (ICE) model for this purpose.
It includes schedules A though T, with optional schedules as well.
can be overwhelming at first glance. Many clients prefer that I develop the submission for them to meet this requirement.
I also support them in DCAA adequacy reviews and ultimately the audit. My participation in developing the submission
will make certain the submission is accepted and is completed in a compliant manner, given your accounting system adequacy
status and contract requirements.
However, for those desiring to complete this
submission on their own, I offer below guidance and instructions in making the submission. This guidance is general
and must be adjusted to reflect unique contractual circumstances. Unique cost structures may also require adjustment
to this guidance as not one set of guidance fits all circumstances. The items below are more of a general approach or
process than a step by step guide. The contractor's unique contractual requirements, cost structure and cost accounting
practices will require adjustments to the standardized steps listed below.
ICE Set Up (The model may be obtained from DCAA at http://www.dcaa.mil/ or I can provide a copy if needed.
a. Click on
Set up Tab and click on Enable Macros under Options.
b. Enter company name, location
and fiscal year end date.
c. Under the indirect pools section answer questions
and state the number of different types of indirect cost pools and specifics on the Fringe pool and allocation base.
This is necessary in order for the ICE model to structure the model worksheets and allocations. The responses will depend
on your cost structure and indirect cost pools.
d. Under Pool information state
yes and define pool as G&A. Name any other indirect cost pools such as Overhead and G&A. Make sure the
model has an entry for each of your indirect cost pools.
e. Click the Run Pool
II. Indirect Cost Pools
Either enter or cut/paste account no., account name and ending balance for each account in the indirect cost pool (G&A)
under schedule B. Schedule C is only used for multiple overhead pools. Schedule D is for intermediate indirect cost pools.
Schedule Fringe is only for a separate fringe pool. Repeat these steps for all indirect cost pools as labeled above.
b. For each indirect cost pool, (Schedules B, C, Fringe and D as appropriate) complete the following.
Enter or cut/past account no. in column A under account no. Do the same for account name under column B. Enter or cut/paste
ending balance in column C. Complete this process for each account.
amounts back to general ledger.
d. Enter adjustments in column I. These will mainly
be adjustments for unallowable costs as negative amounts.
e. List each adjustment
as a note in column M. Below the schedule describe each adjustment in an explanatory note.
Delete all DCAA notes and text boxes.
g. Do not enter any data or change the cells
colored in aqua or yellow. These contain formulas and links.
h. Double check that
the subtotals, totals and other formulas are operating properly.
a. Unhide columns B through H. Add rows as needed for project line items for
each type of contract.
b. Enter or cut/paste contract no. and task/CLIN in columns
A and B by contract type (This data should be taken from your project cost report including all projects). I often add a column
for the contractor project no. as a matter of reference.
c. Enter or cut/paste
direct labor into the appropriate column labeled labor. Do the same for travel, material, ODC and subcontracts under their
d. Verify totals and all data calculates properly.
e. Enter B&P and IR&D in the rows labeled under the appropriate column.
f. Delete DCAA instructions and text boxes.
that schedule H information now is linked to schedules E, H-1, Summary H, G, G-1 and I. Verify these amounts are correct.
Add explanatory notes as may be appropriate.
h. Notice that the indirect costs
are automatically allocated to each contract based on schedules B, C and Fringe. This is all summarized by schedule E. The
rates are taken from schedule A. I recommend that the indirect cost allocations be validated for accuracy.
IV. Schedule I
a. Notice that contract information and
schedule H total costs have been linked over to schedule I for cost reimbursable contracts. Verify accuracy.
b. Enter prior years cumulative incurred cost from prior year schedule I column J to current year
schedule I column F if applicable.
c. Enter cumulative billing information by
contract columns K, L and M.
d. Delete DCAA instructions and text boxes.
e. Recheck nos. and note over/under billed calculation column N.
Complete physically complete and Penalties columns with yes or no. Generally penalties apply to contracts exceeding $650,000.
Note: Current year costs for time and material contracts are derived from schedule K, not
V. Schedule J
a. If any
subcontracts were awarded under either cost reimbursable or time and material contracts complete the information requested
on schedule J.
VI. Schedule K
each time and materials contract complete schedule K. For each contract list each labor category including hours and
billing rate. Below the labor categories enter any materials or ODC‘s billed. The schedule
will apply the G&A rate if applicable listed in schedule A.
a. Link general ledger labor accounts from schedule B, C, D, Fringe, H as may
be applicable to the appropriate lines in the general ledger half of the Schedule L.
Insert the quarterly form 941 taxable wages by quarter.
c. Insert adjustments
as indicated and needed.
d. Both the general ledger labor amount and the Form
941 amount plus adjustments must be agree.
e. Remove DCAA instructions and text
f. Provide any explanatory notes such as reasons for adjustments as applicable.
VIII. Schedule M
If applicable, list any decisions or
agreements with the contracting officer that impact direct or indirect costs. Should also list any accounting or organizational
changes that impact the allocation of costs to contracts.
IX. Schedule N
This is the Certification of Indirect Costs. It needs to be signed by an officer for the submission
to be considered adequate and auditable.
X. Schedule O
This is the schedule for contract closing information. If any contracts were physically completed during
the year, complete this schedule for each physically completed contract.
All other schedules are considered "optional" by DCAA
as indicated in the flowchart. Some auditors do request the optional schedules be completed. I do not complete
these voluntarily unless compelled by the government. Contractors are free to complete these schedules if preferred.
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