FEDCONSOL
FAR UPDATE 52.216-7,
Allowable Cost and Payment
(Jun 2013)
"It's never too early to prepare for your incurred
cost submission“
(A webinar sponsored by Pleasant Valley Business
Solutions)
Objective
• Know the regulations
• Know the support requirements for an adequate
submission
• Know who you are submitting to
• Know which schedules can be complete routinely,
monthly, quarterly and upon independent audit.
FEDCONSOL
Know the Regulations
• FAR Update 52.216-7 Allowable Cost and Payment (June 2013)
• DCAA FAR Cost Principles Guide
• FAR 31.201-1, Composition of Total Costs
• FAR 31.202, Direct costs
• FAR 31.203, Indirect costs
• FAR 31.205, Selected Costs
• DCAA Penalties for Mischarging
• Truth in Negotiations Act (TINA)
• Other agencies may have specific reference documents
FAR Update 52.216-7
Allowable Cost and
Payment (June 2013)
• Updated to include incurred cost schedule adequacy guidelines
• FAR 52.216-7(d)(2)(iii) An adequate indirect cost rate proposal shall
include the following data unless otherwise specified by the
cognizant Federal agency official. [Standard ICS Schedules A - O]
• FAR 52.216-7(d)(2)(iv) The following supplemental information is not
required to determine if a proposal is adequate, but may be required
during the audit process. [Optional ICS Schedules A - O]
• FAR 52.216-7(d)(2)(v) Requires contractors to update billings on
all contracts to reflect the final settled rates within 60 days
FEDCONSOL
DCAA FAR Cost Principles
Guide – Total Cost
• FAR 31.201-1, Composition of Total Costs -
The total cost,
including standard costs properly adjusted for applicable variances of a
contract, is the sum of the
direct
and
indirect
costs
allocable
to the
contract, incurred or to be incurred, plus any allocable cost of money
pursuant to 31.205–10, less any allocable
credits
.
• FAR 31.201-2, Allowability - A cost is allowable only when the cost
complies with all of the following requirements
• FAR 31.201-3, Reasonableness - A cost is reasonable if, in its nature and
amount, it does not exceed that which would be incurred by a prudent person
in the conduct of competitive business
.
• FAR 31.201-4,
Allocability
- A cost is allocable if it is assignable or chargeable
to one or more cost objectives on the basis of relative benefits received or
other equitable relationship.
• Terms of Contract (indirect rate ceilings)
• FAR 31.205, Selected Costs (Select unallowable costs defined)
DCAA FAR Cost Principles
Guide – Total Cost
(Continued)
• FAR 31.201-5
Credits
- The applicable portion of any income, rebate,
allowance, or other credit relating to any allowable cost and received
by or accruing to the contractor shall be credited to the Government
either as a cost reduction or by cash refund.
• FAR 31.202,
Direct costs
-
A direct cost is any cost that can be
identified specifically with a particular final cost objective.
• FAR 31.203,
Indirect costs
-
After direct costs have been
determined and charged directly to the contract or other
work, indirect costs are those remaining to be allocated to
intermediate or two or more final cost objectives.
FEDCONSOL
Know the support
requirements for an
adequate submission
• Final Trial Balance for the current and previous
fiscal years
• Job Cost for each direct cost account on the trial
balance
• Contract Brief
• Additional info for Contract type, Customer type,
Contract limitations, etc
• T&M Billing Rate Schedules
• Subcontract Vendor Brief
• Prime contract number working on.
• Address
• Point of Contact
• Subcontract Value
• Period of Performance
• Award Type
• Paid when Paid
• Value Added analysis
Know the support
requirements for an
adequate submission
(Continued)
• All Sales Invoices to customers
• Quarterly 941 Filings
• Listing of Decisions, Agreements or
Approvals from DCAA, CO
• Listing of Accounting or Organizational
changes
FEDCONSOL
Routine Schedules
• Contract Briefs (update for mods)
• Subcontract Briefs (update for mods)
• Value Added Analysis
• Subcontractor Cost
• Paid When Paid
• Trial Balance
• Review for Reasonableness
• Review for Allocability
• Review for FAR Part 31 Unallowable
• Listing of Decisions, Agreements or
Approvals from DCAA, CO (Schedule M)
• Listing of Accounting or Organizational
changes (Schedule M)
Monthly Schedules
• Indirect Cost Rate Calculation (Schedules A
through E)
• Job cost (Schedule H)
• Indirect Cost Rate Variance Analysis
• T&M Sales Invoices (Schedule K, I)
• CPFF Sales Invoices (Schedule I)
FEDCONSOL
Quarterly Schedules
• Labor reconciliation to Quarterly 941
(Schedule L)
Annual Schedules
• Final Trial Balance
• Final Indirect Cost Rate Calculation
• Final Job cost
FEDCONSOL
Adequate ICS Schedules
(A) Summary of all claimed indirect expense rates, including pool, base, and calculated indirect rate.
(B) General and Administrative expenses (final indirect cost pool). Schedule of claimed expenses by element of cost as identified in accounting records (Chart of Accounts).
(C) Overhead expenses (final indirect cost pool). Schedule of claimed expenses by element of cost as identified in accounting records (Chart of Accounts) for each final indirect cost pool.
(D) Occupancy expenses (intermediate indirect cost pool). Schedule of claimed expenses by element of cost as identified in accounting records (Chart of Accounts) and expense reallocation to final indirect cost pools.
(E) Claimed allocation bases, by element of cost, used to distribute indirect costs. (F) Facilities capital cost of money factors computation.
(G) Reconciliation of books of account (i.e., General Ledger) and claimed direct costs by major cost element.
(H) Schedule of direct costs by contract and subcontract and indirect expense applied at claimed rates, as well as a subsidiary schedule of Government participation percentages in each of the allocation base amounts.
(I) Schedule of cumulative direct and indirect costs claimed and billed by contract and subcontract.
(J) Subcontract information. Listing of subcontracts awarded to companies for which the contractor is the prime or upper-tier contractor (include prime and subcontract numbers; subcontract value and award type; amount claimed during the fiscal year; and the subcontractor name, address, and point of contact information).
(K) Summary of each time-and-materials and labor-hour contract information, including labor categories, labor rates, hours, and amounts; direct materials; other direct costs; and, indirect expense applied at claimed rates.
(L) Reconciliation of total payroll per IRS form 941 to total labor costs distribution.
(M) Listing of decisions/agreements/approvals and description of accounting/organizational changes. (N) Certificate of final indirect costs (see 52.242-4, Certification of Final Indirect Costs).
(O) Contract closing information for contracts physically completed in this fiscal year (include contract number, period of performance, contract ceiling amounts, contract fee computations, level of effort, and indicate if the contract is ready to close).
