Blog - DCAA Audit and Government Contract Consulting


Government Makes Changes to Allowable Air Fare Costs

The Government revised the Air Fare allowable cost rules (FAR 31.205-46) by further limiting allowable costs to the lowest air fare available to the contractor. DCAA chimed in and issued revised audit guidance by its MRD dated March 22, 2010. In this guidance DCAA is instructing its auditors to make assessments of contractor policies and procedures to secure the low

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FAR 52.203-13, Implements Significant Compliance Requirements

New rule affecting a contractors compliance and internal control systems is codified by FAR 52.203-13. Actually the clause has been around for a while. It was established in 2008. The rule has been heavily debated with back and forth but is now implemented. In addition DCAA has started an initiative to audit against it. The new rule is applicable to contracts exc

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Deferred Compensation

I am often asked about deferring compensation especially in start up situations. This cost can be allowable if it meets all the requirements of FAR 31.205-6 (k) which incorporates CAS 415, Deferred Compensation. Keep in mind under cost reimbursable contracts and in situations where the Progress Payments clause is invoked billable direct costs must be paid in the nor

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DCAA Increases Threshold For Price Proposal Audits

DCAA by its Memorandum dated October 18, 2010 increased the threshold for conducting audits on price proposals to $10 Million for fixed price proposals and $100 Million for cost type proposals. The only exception is under exceptional circumstances outlined in the contracting officer audit request letter. I agree with this development as it reduces potential audit

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Collecting On Incurred Costs Submissions

The whole idea under a cost reimbursable contract is to submit an Incurred Cost Submission at year end and firm up the billings to actual rates. However, DCAA has fallen far behind on its audits to finalize rates at year end. In some cases as much as three years. This situation is not addressed in the Allowable Cost and Payment clause. This is unfortunate for contr

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Marketing Costs

I hear DCAA is going to re-focus on marketing costs for allowability. I understand they are going to start increasing its scrutiny on reviewing sales and marketing expense reports for allowability. This should make one emphasize the segregation of promotional marketing from Bid and Proposal efforts and direct selling efforts. The latter two are allowable in most ca

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