Benefits
Align what you sell to how the government buys
Define your offering and determine contract eligibility, applicable regulations, and operational requirements so you’re positioned to win.
- Contract eligibility assessment
- Compliance requirements assessment
Account for your business the government’s way
Go beyond GAAP with support navigating Cost Accounting Standards (CAS) and developing indirect rates aligned to your contract strategy.
- CAS compliance analysis
- Indirect rate development
Build a team that can deliver
Plan how your people will support your government business with an operating model that accounts for day-to-day realities like timekeeping and labor segregation.
- Operating model strategy
Scale systems that secure your future
Develop an ERP strategy that works across your entire business portfolio — whether government or commercial — and accounts for security controls like CMMC.
- ERP strategy
- CMMC gap analysis
Related
success stories
Take a deeper dive and discover how we’ve helped clients with Public Sector Entry & Expansion.
Global Telecom & Technology Company
Entered government contracting market to further their mission of global broadband coverage
Read moreFAQs
Can’t find what you’re looking for?
What should a commercial company evaluate before pursuing government contracts?
Before pursuing federal contract opportunities, commercial companies must assess whether their existing operations, financial systems, and organizational structure are compatible with government contracting requirements. Key considerations include contract type eligibility, the applicability of CAS, FAR Part 31 cost principles, and whether the company’s accounting system can support cost-reimbursable contract requirements. Companies should also evaluate labor segregation practices, timekeeping systems, and indirect cost structures to determine alignment with government expectations. Entering the market without this foundational assessment frequently results in compliance deficiencies that surface during pre-award surveys or early DCAA audits, creating friction precisely when first impressions matter most.
How does government cost accounting differ from standard commercial accounting practices?
Commercial accounting under GAAP is designed to satisfy financial reporting and tax obligations. Government cost accounting operates under an entirely different framework, one governed by FAR Part 31 cost principles, CAS, and agency-specific requirements that dictate how costs are accumulated, allocated, and billed to federal contracts. Where GAAP permits broad flexibility in cost classification, government contracting requires consistent application of cost allocation methodologies, documented indirect rate structures, and clear separation between direct and indirect costs. Companies entering the government market that attempt to apply commercial accounting logic to federal contracts consistently encounter questioned costs, billing disputes, and DCAA audit findings that erode contract profitability.
What operational changes does a company typically need to make when entering the government market?
Entering the government market requires operational adjustments that extend well beyond the finance function. Timekeeping systems must be capable of capturing labor charges by contract, project, and cost element in a manner that satisfies DCAA floor check requirements. Labor segregation between direct and indirect activities must be enforced consistently and documented. Procurement functions must incorporate FAR flowdown clauses into subcontracts and vendor agreements. For companies pursuing defense contracts, CMMC 2.0 cybersecurity requirements will increasingly govern system and network eligibility. An operating model strategy that accounts for these day-to-day realities from the outset avoids the costly retrofitting that companies face when compliance requirements are treated as an afterthought.
How should a company approach indirect rate development when entering the government market?
Indirect rate development for a government market entrant requires building a rate structure from the ground up that reflects both the company’s actual cost behavior and the requirements of its target contract types. Rates must be organized into defensible indirect cost pools, supported by a consistent allocation methodology, and aligned to the company’s anticipated contract mix of cost-reimbursable, time-and-materials, and fixed-price vehicles. Prospective rates submitted in proposals must also be reconcilable to actual costs incurred, as the gap between proposed and actual rates is a primary focus of DCAA forward pricing audits. Companies that develop indirect rates without this forward-looking alignment frequently underprice early contracts or face rate adjustment demands that compress margins on work already underway.
What role does ERP system selection play in a company’s government contracting strategy?
ERP system selection is one of the most consequential infrastructure decisions a government market entrant will make. The system must support job cost accounting, labor distribution, indirect rate calculations, and audit trail requirements that satisfy DCAA accounting system adequacy standards under DFARS 252.242-7006. For companies operating across both commercial and government lines of business, the ERP must also accommodate cost segregation between business segments without creating operational friction. Companies pursuing defense contracts should additionally evaluate whether the system supports CMMC 2.0 security controls and controlled unclassified information (CUI) handling requirements. An ERP strategy developed without this compliance lens often requires expensive reconfiguration once contract performance is already underway.
What are the most common mistakes companies make when entering the government contracting market?
The most consequential mistakes share a common root: underestimating how fundamentally different the government market is from commercial business development. Companies frequently pursue cost-reimbursable contracts before their accounting system has been assessed for DCAA adequacy, submit proposals with indirect rates that are not grounded in actual cost structure, and neglect to implement FAR-compliant procurement and timekeeping systems before contract award. Others fail to assess CAS coverage thresholds before pricing large contracts, exposing themselves to retroactive cost accounting practice change obligations. The companies that enter the government market successfully are those that treat compliance infrastructure as a prerequisite to revenue, not a consequence of it.
Enter the market ready to win
Capitalize on public sector revenue streams while meeting the compliance expectations that come with it.