DCAA (Defense Contract Audit Agency) is trying to close out outstanding Incurred Cost Submissions (ICS) and if yours has not been submitted you are at RISK! A recent MRD states that in May 2016 DCAA will provide a list of delinquent contractors to the Defense Contract Management Agency (DCMA) for ICS Fiscal Years Ending (FYE) 2014 and older that do not have a valid extension.
So what happens if you’re on this list? Well, June 2016, if DCMA does not notify the DCAA of a valid extension or ongoing coordination that would authorize leaving the assignments open, DCAA audit teams are advised to close out ICS assignments on the list. If an ICS is received after an assignment has been closed, DCAA can re-open the assignment if requested.
On March 3, 2016, our Aronson LLC Government Contracting specialists Donna Dominguez and Aisha Mian hosted “Cracking the Code: Preparing an Incurred Cost Submission,” where they provided tips, guidance, and best practices to help government contractors efficiently prepare Incurred Cost Submissions. As a follow up to this webinar, Donna and Aisha have prepared answers to attendee questions that we wanted to share with our blog readers. If you’re interested in viewing a recording of this webinar, please click here.
If you’re a contractor that has a majority of non-DoD contracts, you’ll want to pay attention to this update on DCAA audits! The 2016 National Defense Authorization Act prohibits the DCAA from providing audit support to any non-DoD agency until the Secretary of Defense certifies that the DCAA has reduced its backlog of incurred cost submissions to 18 months or less. While this sounds advantageous to the DCAA, it sounds relatively painful to a contractor who is currently amidst an audit with the DCAA.
Professional Services Council (PSC) recently invited Sherry Kobus, DCAA (Defense Contract Audit Agency) Small Business Program Manager to speak at their seminar held on October 9, 2015. Sherry spoke to both small and large government contractors regarding a variety of topics that impact small businesses. Some highlights from Sherry’s presentation are:
DCAA issued an MRD on August 27, 2015, “Revised Checklist for Determining Adequacy of Contractor Incurred Cost Proposal.” The purpose of the MRD is to revise the adequacy checklist so as to have clearer defined guidelines in determining if the proposal is adequate enough to audit. It’s no longer about making sure you can check all the boxes as adequate.
The change to the ICS proposal adequacy review is to make an initial decision on whether the proposal is auditable and help the audit team determine whether to accept or decline the engagement. If the audit team should accept the engagement they may determine to expend efforts on work done during the ICS audit. This means a contractor could have one or two items deemed inadequate; however, the overall proposal is still suitable to be audited. Conversely a contractor may have only one item deemed inadequate but that one item can make the proposal unacceptable to audit. DCAA auditors are required to make reasonable decisions based on the facts of each submission and provide supporting rationale.