Government Contract Cost Accounting System-Adequacy and DCAA Compliance
A pre-requisite to government contracting, particularly to a negotiated contracts is demonstrating an adequate cost accounting system. The need for a compliant accounting system depends on the contractor’s contract types and other contract-specific circumstances. For example, a negotiated fixed price contract does not require an adequate accounting system, only that the cost or pricing data submitted meets the cost or pricing data requirements of FAR Subpart 15.4.
The accounting system should report specific 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 under FAR Subpart 16.3. Obtaining approval is a significant accomplishment in this industry and working with experts will assure the process is successful.
Capital Edge Consultants assist contractors with their government contract cost accounting systems. This includes assisting them with identifying the need for and transitioning to a DCAA compliant systems when needed. As we discussed, in some circumstances, this is a pre-requisite to winning cost reimbursable and other types of government contracts.
We also put together some great resources for you:
This Preaward Accounting System Adequacy Checklist is used for contractors new to government contracting that have cost reimbursement contracts, or for contractors that are receiving progress payments based on cost. The checklist assesses whether the requirements for an adequate accounting system have been met. dc
Another resource is the DCAA Accounting System Requirements overview.
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