Government Contract Consulting
Harness your opportunities and reduce your complexities.
We provide CPA-led accounting and compliance services to help government contractors navigate federal regulations and reporting requirements, manage pre-award survey and post-award audits, and assess billing rates and cost submissions with confidence and clarity.
Being a government contractor is challenging in itself. Aside from the large dollar federal contracts that you could potentially win, there is the complexity of the Federal Acquisition Regulations (FAR) and all that specialized government contract accounting you are going to have to do in order to keep your contracts. You need an expert. If you are looking for a small CPA firm that specializes in providing government contract accounting and Defense Contract Audit Agency (DCAA) compliance services, well that is our expertise. We cover a wide range of accounting and business advisory services, many unique to the aspects of working on government contracts.
DCAA-Compliance
For QuickBooks Desktop
- Setting up QuickBooks Desktop to be compliant with Federal Acquisition Regulations (FAR) and Defense Contract Audit Agency (DCAA) requirements
- Very successful accounting system acceptance track record
- Staff training to maintain compliance and resolve compliance issues
- Ongoing QuickBooks Desktop consulting and troubleshooting
- Periodic QuickBooks Desktop Sanity checks to make sure you are maintaining compliance
Financial Statements
with a government contractor twist
- Traditional compilation of financial statements in accordance with GAAP (the basis for DCAA accounting system compliance)
- Reviews of financial statements to meet 8(a), government contract or outside party requirements
- Reviewing for unallowable transactions
- Reviewing proper classification of direct and indirect costs
- Reviewing for compliance with generally accepted accounting principles (GAAP), FAR, and IRS regulations. Our triple team approach.
- Quarterly or annually
PRE-AWARD SURVEYS AND POST-AWARD AUDITS
Expertise with pre-award system surveys and post-award audits for federal compliance and readiness.
INCURRED COST SUBMISSIONS
Expertise with Incurred Cost Submissions to ensure compliance and accurate financial reporting.
PROVISIONAL BILLING RATE
Expertise with Provisional Billing Rates to support timely and compliant contract billing.
Our Expertise Also Includes
For litigation matters involving calculation of commercial damages from breach of noncompete agreements, contractor delays, joint venture agreements, subcontract agreements, employment contracts and sale of business, visit CJA Forensic Accounting, LLC.
Incurred cost submissions/proposal including ICE model
Accounting system mock-audits and DCAA compliance evaluations
Preaward accounting system survey and post-award system audits
Billing System Reviews
Analyzing and setting up indirect cost rate structures and allocation pools
Provisional billing rates and forward pricing rate proposals
Reconciliation of billed and incurred costs for government contract close-outs
Troubleshooting QuickBooks Desktop for government contractors
Preparation for DCAA or government agency audits
Independent Accountant’s Review of indirect cost rates
Assistance in preparing cost and pricing data and cost breakdown schedules for proposals
Policy and procedures manual
Assistance in understanding FAR contract clauses
Path to DCAA Compliance
Who says QuickBooks Desktop can’t pass a DCAA system audit?
DCAA does not endorse any accounting system nor consider any accounting system approved automatically, so why not continue to use QuickBooks Desktop. Cheryl Jefferson & Associates has a proven success rate of helping our clients have their QuickBooks Desktop accounting system approved or deemed adequate for government contracts. The accounting software has the capability of tracking costs and generating the necessary reports for government contracts just like any other software designed especially for government contracting.
QuickBooks Desktop is a good choice for small government contractors who want complete control over their financial data, want a user-friendly accounting system, and want to feel good knowing they didn’t need a loan to buy it. We encourage our small business owners to use an accounting software package where they are not reliant on the bookkeeper or accountant to tell them how business is performing. An informed owner makes for a better run business.
Not only is QuickBooks Desktop easy to use for the business owner, but recruiting accounting staff or a bookkeeper that can use the accounting system is easier too.
Pre-award/Post-award System Set-up
One of the most daunting tasks for small government contractors in being able have their accounting systems determined to be adequate by Defense Contract Audit Agency (DCAA). Per DCAA, “the pre-award accounting system survey is an audit to determine the acceptability of a contractor’s accounting system for accumulating costs under a prospective Government contract”. Without a good bill of health from DCAA, contractors are limited in the types of contracts that they can be awarded.
Our process for preparing you for a DCAA pre-award audit, involves 3 steps:
- Setting up accounting software
We redesign your chart of accounts and set up components in order for you to properly track job costs. We turn on key features in your accounting software necessary for complying with government contract accounting requirements. Ninety-percent (90%) of our clients use QuickBooks Desktop and the other ten-percent (10%) use PROCAS, Costpoint or WrkPlan. - Setting up indirect cost rate structure
We assist you in analyzing your business structure to determine an indirect cost rate structure that is specific to your small business. We assess your business operations, employment costs, locations, and business units to develop cost allocations that make your company competitive. Accurate projections of indirect cost rates are important for business growth and profitability. If you don’t know what your operating expenses are likely to be, how can you accept a contract award that does not cover your costs and required cash flow? - DCAA compliant accounting policies and procedures
An adequate accounting system is more than just the accounting software. Your business has to have policies and procedures that ensure internal controls are in place to keep your accounting and financial reporting in compliance with Federal Acquisition Regulations.
Even after obtaining the initial approval, you may become subject to a second accounting system audit, called the Post-Award audit. In this audit, DCAA is not only determining whether your accounting system can accumulate costs, but that the billing to and the purchasing for government contracts are adequate.
Incurred Cost Submissions
The Federal Acquisition Regulations (FAR 52.216-7) require that government contractors submit an incurred cost proposal within 6 months after the end of its fiscal year. This applies to contractors with cost reimbursable contracts or time-and-material contracts where G&A or Material Handling rates are billed to the government.
If you do not provide a submission, DCAA may recommend that the contracting officer make a unilateral determination. In a unilateral determination, the contracting officer will determine your indirect cost rates for you. These rates will apply to all contracts, both pending and closed and these rates could be considerably lower that your actual rates. In addition, you could receive penalties for including expressly unallowable costs, or costs previously determined to be unallowable for your company, in your indirect cost submission.
Preparing the incurred cost submission can be a time-consuming task for an understaffed small business. We can assist you in preparing your submission and supporting data. We provide the following services:
- Preparing the electronic incurred cost rate proposal
- Compiling supporting documentation to accompany the submission
- Reviewing target accounts for expressly unallowable costs
- Identifying and analyzing costs that may become “red flags” for government auditors
- Preparing client recommendations for improvements
Ongoing Consulting Support
Obtaining a government contract is an excellent business achievement. However, inadequate pricing and poor contract administration could be a financial disaster for your business. We can decipher the meaning of FAR and CAS and work with you to competitively price your proposals and prepare you for the increased reporting required in government contract accounting. We provide ongoing consulting support to our small business clients to help keep them competitive and growing, including:
Proposal Pricing
- Assisting with deciphering government cost proposal requirements
- Assisting with developing cost and pricing data
- Review of proposal prior to submission to identify deficiencies in pricing methodology
Contract Administration
- Assisting with contract financial reporting
- Assisting with complying with contract clauses, including those that flow down as a subcontractor
Guidance with FAR, CAS, and DCAA
- Providing consultations on the applicability of clauses to accounting procedures
- Assisting with determining which regulations are applicable to the business
DCAA Audit Support
- Liaison with auditors
- Reviewing requests for information and documentation prior to submission
Forward Pricing and Billing Rates
- Assisting with development of provisional billing rates
- Assisting with development of forward pricing