Benefits

Recover costs in real-time

Develop provisional billing rates with expert guidance to reduce repayment risk and keep revenue aligned with performance.

  • Provisional billing rates
  • Contract rate limitations

ICS done right, every time

Prepare and validate your ICS against auditor expectations, with built-in adequacy checks to limit questioned costs.

  • Incurred Cost Submission
  • Adequacy validation

Reconcile with precision

Establish and build repeatable practices and internal capabilities that streamline future awards.

  • Indirect rate training
  • Finalized cost guidance
  • Contract closeout support
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FAQs

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What is an ICS?

An ICS is a crucial process for contractors working with government contracts. It involves submitting a detailed report of all costs incurred during a contract period to ensure compliance with federal regulations.

Flexibly-priced contracts, such as cost-reimbursement and time-and-materials, provide for reimbursement of indirect costs based on estimated indirect expense billing rates. These estimated rates require adjustment on an annual basis to determine final indirect cost rates based on actual incurred costs for the contractor’s fiscal year. These final rates determine whether the contractor owes the government for overbillings or the government owes the contractor for underbillings.

When is an ICS required?

If your organization has contracts containing FAR clause 52.216-7 Allowable Cost and Payment, then an annual final indirect cost rate proposal, more commonly referred to as the incurred cost submission or incurred cost proposal (ICS or ICP) is required. The ICS finalizes indirect expense rates and justifies claimed direct contract costs, ensuring compliance with federal regulations. The DCAA or another auditing body reviews these proposals to verify compliance and accuracy.

When must the ICS be submitted?

The requirement to submit a FAR ICS is contained in FAR clause 52.216-7(d)(2)(i) – Allowable Cost and Payment, which states, “The contractor shall submit an adequate final indirect cost rate proposal to the contracting officer (or cognizant federal agency official) and auditor within the 6-month period following the expiration of each of its fiscal years.” This means the date is June 30th for contractors with a calendar fiscal year end of December 31.

What is the current contractor compensation limit?

The Office of Federal Procurement Policy (OFPP) has published the below compensation cap amounts. Auditors should use these cap amounts when evaluating compensation costs for contracts awarded on or after June 24, 2014.

  • 1/1/25 – 12/31/25: $671,000
  • 1/1/24 – 12/31/24: $646,000
  • 1/1/23 – 12/31/23: $619,000

Is the DCAA ICE Model required?

No, the DCAA ICE Model is not required, however the required information that it contains is. Contractors have the ability to submit using their own format or template with the same required information.

What is the statute of limitations for an ICS?

The statute of limitations for an ICS is 6 years and the clock begins upon submission.

When do ICS audits occur?

The incurred cost audit can occur anytime after the ICS is submitted. Typically, the audit happens months to years after submission. Given this delay related to incurred cost audits, it is important to ensure that the data supporting the ICS is organized and available when the audit starts.

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Build rates that not only meet requirements but maximize revenue, defend performance, and generate operational momentum for future awards.

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