Incurred Cost Submission
Does your organization have contracts containing FAR 52.216-7 Allowable Cost and Payment? If so, an annual Final Indirect Cost Rate Proposal, more commonly referred to as the Incurred Cost Proposal (ICP) or Incurred Cost Submission (ICS) is required. We work with numerous companies to develop, assist with, or review final indirect cost submissions.
What is Incurred Cost Submission?
When Must the Incurred Cost Submission be Submitted?
The requirement to submit a FAR Incurred Cost Submission 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.
Incurred Cost Submission Training
Capital Edge provides incurred cost submission training to Federal contractors. We provide preparation for the ICS audit, review and recommendations, audit management and audit response. Our Government contract consultants provide an overview of the submission process, helping with everything ICS related.
To learn more about our incurred cost submission training, contact us today.
BREAKING: GovCon Compliance Updates
Join two of our ICS Experts Jennifer Rettelle and Marie Salamone as they cover 5 of the most important steps you should take when preparing for the Audit while preparing your annual Incurred Cost Submission.
- Our team of experts possess unsurpassed qualifications, experience, and certifications and have previous working experience including industry, Government or “Big Four” consulting firms and possess specific relevant experience navigating Federal compliance.
- We have extensive experience supporting clients with incurred cost proposals from beginning to end, or where support is needed in between.
- Our experts roll up their sleeves to provide just the right level of support each client needs, including preparing entire incurred cost proposals, preparing certain schedules, reviewing proposals prepared by clients, and supporting incurred cost audits.
Have Questions or need Consulting Expertise Regarding ICS?
Tips to Prep for the Audit While You Prepare a FAR Incurred Cost Submission (ICS)
- Documentation is critical for a successful Incurred Cost audit outcome.
- Spread the knowledge wealth. Continuity is essential as there will likely be a lag in time between submission and an audit of the incurred cost proposal.
- Prepare supplemental schedules, even though they are not required for a submission to be deemed adequate by DCAA.
- Keep a “working copy“ of the incurred cost proposal. This version of the file should be fully linked and contain all completed supplemental schedules. It will prove invaluable during the incurred cost audit.
- Understand audit expectations. Clear communication and setting of expectations at the beginning of an audit can smooth the process.
Latest Questions Being Asked About FAR Incurred Cost Submission
The Office of Federal Procurement Policy (OFPP) has not published the 2020 compensation cap amounts. However, the OFPP did post the formula to be used to calculate the cap. The cap has also been released by DCAA in MRD 20-PSP-004(R) dated August 20, 2020.
- 1/1/22 – 12/31/22: $589,000
- 1/1/21 – 12/31/21: $568,000
- 1/1/20 – 12/31/20: $555,000
- 1/1/19 – 12/31/19: $540,000
Cap is for contracts awarded after June 24, 2014.
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.
The statute of limitations for an ICS is 6 years and the clock begins upon submission.
An incurred cost proposal or incurred cost submission is required for Federal contractors who have flexibly priced contracts or subcontracts containing FAR 52.216-7 – Allowable Cost and Payment clause.
The DCAA Incurred Cost Submission Adequacy Checklist is can be found here on the DCAA website.
An incurred cost proposal or ICS is required for Federal contractors who have flexibly priced contracts or subcontracts containing FAR 52.216-7 – Allowable Cost and Payment clause. It is due within 6 months following the end of the contractor’s fiscal year. For most contractors with a December 31 fiscal year end, the submission is due the following June 30th.
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. Check out this video to learn best practices for preparing for the incurred cost audit while preparing the ICS.