June 30th deadline is approaching-  Is your Incurred Cost submission Complete?

Government contractors take note!  For those government contractors who run on a calendar fiscal year, your contracting officer (CO) will be expecting your organization’s incurred costs submission (ICS)  by the  June 30th deadline.

Contractors with cost reimbursable and time & material (“T&M”) contracts should start focusing on the submission of their incurred cost proposals, also known as an incurred cost submission (“ICS”) by early spring.

Contractors must report actual costs incurred on government contracts, including both direct and indirect cost and reconcile to the amounts billed. Government contractors who have obtained cost reimbursable contracts and T&M contracts are required to submit incurred cost proposals under Federal Acquisition Regulation (“FAR”) clause 52.216-7, Allowable Cost and Payment. These cost proposals are due within six months following the close of the company’s fiscal year.If you need an extension, you can contact your CO and make a request for a waiver.

In accordance with 10 U.S.C. 2324(h) and 41 USC 256(h) the ICE must be certified by an individual at a level no lower than vice president or chief financial officer of the business. If the ICE is not certified the contracting officer may unilaterally establish the rates.

In order to ensure compliance with the regulations, it is best to seek  professional assistance from firms that are experienced with Incurred Cost.

We invite you to contact us  and let our experts assist.

Resources

On Demand-Preparing for an Incurred Cost Submission- Click to view

Take an ICS Seminar/Class – Visit the – Upcoming Training Calendar

The Incurred Cost Electronically (ICE) Model is user-friendly and can be used to prepare an adequate incurred cost proposal in accordance with FAR 52.216‐7. This model can be found on the DCAA website: http://www.dcaa.mil/ice_model.html

An adequate indirect cost rate proposal shall include user-friendly data unless otherwise specified by the cognizant Federal agency official (per FAR 52.216‐7):

The Defense Contract Audit Agency (“DCAA”) has an Incurred Cost Electronically (“ICE”) model that can be downloaded from their website for government contractors to use as a template. There may be schedules needing to be added or schedules that are not applicable.  However, this model should provide a great place to start. An adequate incurred cost proposal must include the following:

  • Summary of claimed indirect expense rates;
  • Indirect expenses properly categorized;
  • Claimed allocation bases;
  • Schedule of facilities capital cost of money factors computation;
  • Schedule of direct costs by contract or subcontract and indirect expense applied at claimed rates;
  • Government participation percentages;
  • Reconciliation of claimed direct costs to the general ledger;
  • Schedule of cumulative direct and indirect costs claimed and billed;
  • Subcontract information;
  • Summary of hours and amounts on T&M/labor hour contracts;
  • Reconciliation of total payroll to the total labor distribution;
  • List of all decisions, agreements, approvals and description of accounting and/or organizational changes; and
  • Contract closing information for contracts completed during the year.

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