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Hill AFB’s FARSite to go away on October 1, 2019

Big news in the hashtaggovcon world: Hill AFB’s FARSite to go away on October 1, 2019.

It’s been accessed online more than 2.3 billion times since its launch in mid-1996.  But on Sept. 30th of this year, it will be retired.

The “it” is the popular and functional FARSite search engine, maintained by Hill Air Force Base near Ogden, Utah, and it is going to be “transitioned” into the FAR search site at Acquisition.gov effective Oct. 1, 2019.

This news was recently released on the FARSite in a tersely-written two-sentence announcement: “FARSite.hill.af.mil is being actively transitioned to Acquistion.gov.  FARSite will be available in the current location through 30 Sep 2019.”

Unofficial But Useful

While the FARSite is widely used by acquisition officials in both government and industry sectors, it never was regarded as the “official” site for the Federal Acquisition Regulation (FAR) and agency FAR supplements.  Instead, it was regarded as the authoritative source for the Air Force FAR Supplement (AFFARS) only.  The FAR search engine at Acquisition.gov, maintained by the General Services Administration (GSA), holds the title of the “official” FAR website.

Despite its unofficial status, FARSite has been popular because of its functionality.  For instance, FARSite provides the ability to search both the FAR and any agency’s FAR supplement simultaneously.  This contemporaneous searching functionality enables users to see search results from two or more sources displayed side-by-side, a feature especially useful when researching the application of a specific FAR provision or clause in a particular agency’s solicitation or contract.

The Unknowns

It is not known at this time whether the simultaneous search capability will be integrated into Acquisition.gov.  There is no information about the transition on the Acquisition.gov website.  Currently, Acquisition.gov only allows for searching of the FAR and the GSAM — the General Services Acquisition Regulation.  The site provides a list of each of the other FAR supplements, hyperlinked to individual agency websites.  Some of these links lead to general agency websites where further searching is necessary, and where the links lead directly to an agency’s FAR supplement, the information is presented in non-uniform formats (e.g., HTML and PDF).

For many years, the FARSite published monthly usage reports.  In the last month, these data were published — July 2017 — over 12 million hits were recorded, comprised of over 3 million individual page views by 53,000 unique visitors.  Military branches made up the bulk of the users in that month but, notably, visitors from GSA and Lockheed Martin appear on the Top 25 users list.

The status of another useful feature of the FARSite is unknown in the transition to Acquisition.gov, namely the integration of Class Deviations to the FAR.  Currently, the text on the FARSite includes a display of DoD Class Deviations where they are applicable to a particular provision or clause.  No such cross-reference appears at Acquisition.gov.

The fate of the FARSite has been in question for more than a year.  On Jan. 3, 2018, the webmaster for FARSite retired.  At that time, the following message was posted: “For now FARSite will continue as you see it. However, due to new AF policies, FARSite’s location will eventually change which introduces unknows that could impact the site in the future. If you have any issues, concerns or opinions as to the sites direction contact USAF SAF/AQC.”   Faced with many questions following that announcement, a new message was posted on Mar. 1, 2018: “The FARSite team remains committed to updating the site and providing accurate, current, and complete postings of the FAR and its many supplements. If you have any questions feel free to contact the FARSite Webmaster at Hill.Farsite@us.af.mil.”

Despite that statement last year, it appears that the plug will be pulled on the FARSite this year at midnight, Sept. 30th.

Source article online from   The Contracting Education Academy at Georgia Tech

GAO Release: Recommendation to monitor and ensure contractor business system reviews are conducted in a timely fashion.

CONTRACTOR BUSINESS SYSTEMS: DOD Needs Better Information to Monitor and Assess Review Process

GAO-19-212: Published: Feb 7, 2019. Publicly Released: Feb 7, 2019.

The U.S. Government Accountability Office (GAO) is an independent, nonpartisan agency that works for Congress. Often called the “congressional watchdog,” GAO examines how taxpayer dollars are spent and provides Congress and federal agencies with objective, reliable information to help the government save money and work more efficiently.

We have written a few times recently on the matter of government contractor business systems.  The government’s (DCAA and DCMA) review of the six contractor business systems is expected to rise significantly in the near term based on information we have received from the DCAA and DCMA.  This GAO report released today adds further reality to this renewed focus on contractor business system reviews.

Contractors are encouraged to take the time and make the investment now to perform proper due diligence to ready themselves for these government reviews.

Fast Facts

The Department of Defense uses data from contractors’ business systems—e.g., accounting or purchasing systems—to guard against fraud, waste, and abuse in DOD contracts. For example, reviewing data from a contractor’s accounting system can help keep the contractor from overcharging.

DOD must review contractors’ business systems to ensure that the data from them can be used. We’ve previously found that it was years behind on some of these reviews.

DOD has an ambitious plan to catch up on these reviews in 3 years but has no way to measure its progress. We recommended that DOD monitor and assess whether it’s completing these reviews as planned.

GAO Findings

Since 2011, the Department of Defense (DOD) has implemented several changes to its processes for reviewing contractor business systems—which include systems such as accounting, estimating, and purchasing. Among other changes, DOD clarified the roles and responsibilities of the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA)—the two agencies that are responsible for conducting the reviews; clarified timeframes for business system reviews and established criteria for business systems; and withheld payments from contractors that were found to have significant deficiencies in their business systems.

DOD does not have a mechanism to monitor and ensure that these reviews are being conducted in a timely manner. For its part, DCAA has conducted few business system audits since 2013, as it focused its efforts on other types of audits. DCAA plans to significantly increase the number of business system audits over the next 4 years, but its success in doing so depends on its ability to shift resources from other audits; to use public accounting firms to conduct other, non-business system audits; and DCAA staff’s ability to execute new audit plans in a timely manner.

GAO Chart Businss System Audit

DCMA relies on the three offices responsible for conducting DCMA-led reviews to manage the reviews, but DCMA does not formally monitor whether these reviews are being conducted consistent with policy nor does it monitor DCAA’s efforts to complete the audits for which it is responsible. DCMA is ultimately responsible for approving a contractor’s business systems. DCMA currently lacks a mechanism based on relevant and reliable information, such as the number of reviews that are outstanding and the resources available to conduct such reviews, to ensure reviews are being completed in a timely fashion. Such information could help inform more strategic oversight on whether the current review process is achieving its intended results, or whether additional changes to the timing of or criteria for conducting reviews are needed.

Why GAO Did This Study

Contractor business systems produce critical data that contracting officers use to help negotiate and manage defense contracts. These systems and their related internal controls act as important safeguards against fraud, waste, and abuse of federal funding. Federal and defense acquisition regulations and DOD policies require that DOD take steps to review the adequacy of certain business systems, but GAO and other oversight entities have raised questions about the sufficiency and consistency of DOD’s review process.

The National Defense Authorization Act for Fiscal Year 2018 contained a provision for GAO to evaluate how DOD implemented legislation intended to improve its business system review process. Among other things, this report examines (1) the changes DOD made to its review process and (2) the extent to which DOD is ensuring timely business system reviews.

GAO analyzed DOD acquisition regulations, policies, and procedures for conducting contractor business system reviews and analyzed data on reviews conducted between fiscal years 2013 and 2018.

Read more on this 

 

DCAA Audits of Government Contractor Business Systems

DCAA Audits of Government Contractor Business Systems – Key Risk Mitigation Strategies to Promote an Adequacy Determination

Craig Stetson, Partner | Capital Edge Consulting, Inc.

The Defense Contract Audit Agency (DCAA) recently indicated as a 2019 agency initiative a significant increase in their 2019 audit efforts around contractor business systems. The DCAA’s renewed focus on performing contractor business system audits, is largely the result of the DCAA’s recent reduction in its prior and long-standing backlog of incurred cost proposal audits. The DCAA is responsible for oversight of three of the six contractor business systems, including accounting, estimating, and material management and accounting. Under this 2019 initiative, the accounting system will be the primary focus with a planned audit activity of nearly 1,000 audits. Estimating and material management and accounting system audits also are planned to increase significantly from the 2018 activity, however, nothing near the planned accounting system amount noted prior.

Download your copy of Key Risk Mitigation Strategies to Promote an Adequacy Determination below:

 

Business Systems Compliance for 2019

Business Systems Compliance Update for 2019 – the DCAA indicated recently a current initiative to significantly increase their audit efforts in 2019 of contractor business systems (accounting, estimating and MMAS).

2018 Reports showed the following data for Business Systems Audits:

  • Accounting Systems: 447
  • MMAS: 7
  • Estimating: 11

2019 Planned Business Systems Audits:

  • Accounting Systems: 995
  • MMAS: 19
  • Estimating: 40

Connect with our experts to learn more about due diligence, self-assessments and gap analyses to ready for these potential audits.

COMPLIANCE UPDATE: New DCAA audit program for accounting system audits under DFARS 252.242-7006.

New DCAA audit program for accounting system audits under DFARS 252.242-7006

This new audit program appears a mix of prior accounting system subsystem audit programs (e.g., billing, labor, direct and indirect costs, etc.), the SF 1408 and the 18 specific DFARS criteria. The compensation system (one of the six subsystems) is not fully addressed in this new audit program Also of note, the DCAA will use the 18 DFARS criteria as their audit baseline notwithstanding the absence in contracts of the applicable.

Click-to-See Master Document- Audit Program

Need more information or help with compliance- Contact us

2018 Government Contract Accounting and Regulatory Update October 17-18, 2018

The Capital Edge Team invites you to the 2 for 1 Registration – 2018 Government Contract Accounting and Regulatory Update October 17-18. Register online and bring a colleague free. Reference promo code 2FOR1ARU2018. 

October 17-18, 2018
The Westin Washington D.C. City Center
Washington, DC
$495 for two registrations!!!!
*Register now and bring a colleague at no charge. Reference promo code 2FOR1ARU2018. 

A professional seminar on government contractor finance management, contracting accounting and audit issue year in review and outlook.

This 1.5-day conference will address the emerging issues related to government contract finance, accounting, compliance, and regulations.  You will have the opportunity to hear from leading financial executives, Defense Contract Audit Agency representatives, Defense Contract Management Agency representatives, practicing attorneys and consultants. Topics will include:

  • Cost, accounting, pricing, estimate audit and regulatory issues
  • Update on Section 809 Panel related to CAS
  • Cybersecurity regulations – current state and how companies address the compliance strategies
  • M&A and due diligence
  • Government contract ERP issues
  • Legal issues and case law updates (CAS, cost allowability, statute of limitation, and more)
  • DCMA review update
  • Third party audits
  • Federal Supply Schedule (GSA Schedule) update
  • DCAA Matters (presented by representatives from DCAA HQ)
  • and much more.

Who Should Attend?
This seminar is intended for professionals from large, medium and small government contractors, financial and consulting organizations, federal agencies and non-profits:

  • CFOs/CEOs/Presidents
  • VPs of Finance, Accounting, Compliance
  • Directors of Finance, Compliance, Business
  • Development, Procurement & Acquisitions
  • Financial Analysts & Accounting Professionals
  • Legal Professionals

The 2018 Government Contract Accounting and Regulatory Update is co-chaired and sponsored by Capital Edge Consulting.

Capital Edge consultants combine their unique backgrounds and experience in consulting, public accounting, industry, and DCAA to provide you with unmatched government contracting expertise. Learn more at capitaledgeconsulting.com.

 

Common Preparation Pitfalls with the Final Indirect Cost Rate Proposal

Common Preparation Pitfalls with the Final Indirect Cost Rate Proposal

Each year, Capital Edge works with numerous companies either developing, assisting with, or reviewing their final indirect cost rate proposals. The requirement to submit a final indirect cost rate proposal, more commonly referred to as the “ Incurred Cost Proposal or Incurred Cost Submission (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.” Are you ready? Capital Edge has identified the major preparation pitfalls contractors face when developing their annual Incurred Cost Submission (ICS).

Get your copy of Common Preparation Pitfalls with the Final Indirect Cost Rate Proposal- Download below!

 

Getting a late start.  Depending on the size of the organization, incurred cost submissions may take a long time to prepare. If the submission is drafted in-house, the finance or accounting staff responsible with preparation have other daily and monthly responsibilities which require their attention in addition to this submission. Plan ahead and get an early start! Extra preparation time means more time to research issues or resolve challenges which may arise. Remember, the ICS requires input from various groups within an organization and is not a “pure” accounting and finance responsibility.

Using a format which does not reflect the FAR requirements or auditor expectations.  FAR 52.216-7(d)(2)(iii) specifically identifies all the information required. In addition, DCAA regularly updates their Incurred Cost Electronic (ICE) Model, as well as the Adequacy Checklist, and these items should be reviewed as part of the preparation process to ensure the submission will meet auditor expectations. Keep in mind that utilizing the “ICE” model is not required, but the content of the individual schedules are required by 52.216-7. The ICE model has a number of limitations related to the number of intermediate and final overhead pools that the model can support, so it is imperative that you understand whether your business may be too complex for ICE. We don’t like the model, but it may work well for you.

Not having current and accurate contract briefs.  Contract briefs identify items such as contract type, indirect rate caps, funding ceilings, or other contractual limitations that need to be accounted for in the submission. Briefs should be updated as contract modifications are issued which change funding, add CLINs, modify contract terms and conditions, etc.

Inaccurate identification of contract types.  Many contractors struggle with having full, accurate, and complete contract lists with accurate contract types. Contracts may be entered into the accounting system and identified with a contract type other than what the contract specifies due to accounting system limitations or unique contract requirements. Not having an accurate identification of contract type for each contract or task can cause numerous challenges when preparing the ICS, including the misidentification of contracts in the actual submission.

Incorrect contract billings.  Contractors sometimes realize that a contract or task has been billed incorrectly. For example, when a cost-reimbursable contract is billed as a time-and-material contract, or cost reimbursement CLINs within FFP contracts are not appropriately identified. These types of errors cause major headaches when preparing the ICS and can lead to large over/under billings and/or additional audits. Properly identifying the contract type in a contract billing brief, contracts list, and the accounting system is essential. Most important, getting an early start provides adequate time to resolve these issues rather than trying to make these decisions at the last minute.

Identifying and removing unallowable costs.  Unallowable costs need to be excluded from claimed costs in the ICS and that is, in fact, the intent of the certification ensuring you have excluded all expressly unallowable costs. Explanatory notes should be utilized to reference the specific FAR clause which is applicable (31.205 – Selected Costs) and special care should be given to review accounts considered high-risk for inclusion of expressly unallowable costs that would be subject to Penalties under the provisions of FAR 42.709 Penalties for Unallowable Cost.

Involving key players too late in the process.  To provide timely information required for submission, it is important to involve key players early in the preparation process. For example, contracts/subcontracts personnel are routinely tasked with providing information on subcontract agreements very late in the preparation process, which oftentimes leaves contractors scrambling to finalize the proposal.

Performing a thorough review.  Each ICS should receive a thorough review ideally by individuals not directly involved in the detailed preparation. This review should include checking all formulas, links, ensuring the costs captured reconcile to the trial balance, and that the final submission complies with DCAA’s adequacy checklist.

Maintaining supporting documentation and work papers.  Preparation of the Incurred Cost Submission often requires input from various personnel across a wide range of functional areas. Employee turnover and the lapse of time between submission and audit can often lead to gaps in information and historical knowledge required to support claimed costs during an audit. Whenever possible, we recommend creating a repository for work papers and supporting documentation to memorialize knowledge gained during preparation of the submission and to assist in meeting the requirements of FAR 31.201-2(d) Determining Allowability.

For many contractors, the deadline for the next Incurred Cost Proposal is June 30th. We recommend getting started soon, to be sure that you have adequate time to prepare the submission. Capital Edge has a wealth of resources available to support contractors with preparation and review of their ICS. Whether your organization is large, small, or somewhere in between, we can help take the stress out of this requirement.

FY 2018 NDAA – House Section 874 (Engrossed)

The House version of the National Defense Authorization Act (NDAA) for fiscal year 2018 contains a provision (Section 874) to repeal contractors’ ability to utilize commercial auditors for purposes of auditing their annual incurred cost proposals.  Specifically, Section 874 of the 2018 NDAA would strike in its entirety subsection (f) of Section 820 of the 2017 NDAA previously passed by Congress and signed by the President.

Get your copy of FY 2018 NDAA – House Section 874: Download below!

FY 2018 NDAA – Title VIII — Acquisition Policy, Acquisition Management, and Related Matters

December 12, 2017 President Trump signed the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018. This signed legislation contains several notable provisions to introduce new or modify existing U.S. federal government contracting compliance requirements. Summarized below are some of the pertinent compliance requirements anticipated for change in the near term:

Performance of Incurred Cost Audits (SEC. 803) – Directs the Department of Defense (DoD) to use qualified private auditors to perform a sufficient number of incurred cost audits to eliminate by October 1, 2020 any backlog of such audits of the Defense Contract Audit Agency (DCAA), and complete audits no later than one year from receipt of a qualified incurred cost proposal.

Get your copy of FY 2018 NDAA – Title VIII — Acquisition Policy, Acquisition Management, and Related Matters: Download below!

FY 2018 NDAA Change to Procurement Thresholds

On December 12, 2017, the 2018 National Defense Authorization Act (NDAA) was signed into law by President Trump. Title VIII of the NDAA contains many provisions designed to reduce burdensome regulation and improve the procurement process. Section 805, 806, and 811 would increase the Micro-Purchase Threshold (MPT) from $3,500 to $10,000, Simplified Acquisition Threshold (SAT) from $150,000 to $250,000, and Truthful Cost or Pricing Data (aka “TINA”) threshold from $750,000 to $2,000,000. The Cost Accounting Standards (CAS) threshold for contract awards would also increase to $2,000,000 since it is tied to the TINA threshold…..

 

Read more: get your copy of FY 2018 NDAA Change to Procurement Thresholds: Download below!