govcon.forum

What are the common issues DCAA looks for during a pre-award audit of a cost-type contract?

Ask a question
Asked Active Viewed 0 timesQuestion
1answer

We are a small business bidding on a federal cost-reimbursement contract for IT services, NAICS 541519. This is our first time pursuing a cost-type contract, as we typically stick to FFP. The solicitation was a full and open competition, and the contracting officer mentioned that if we are the apparent awardee, there could be a DCAA pre-award audit. I understand this is to ensure our proposed costs are reasonable and allowable. We have our accounting system in place, but I am not sure what specific areas DCAA tends to scrutinize in these pre-award audits. What are the common issues DCAA looks for during a pre-award audit of a cost-type contract, and how can we best prepare for it?

dcaacost-plusauditcomplianceaudits
ShareReport
asked Priya S. Verified vendorCapture manager, IT services · Herndon, VA · 485 rep

1 answer

0

The Defense Contract Audit Agency (DCAA) looks for adequate accounting systems, proper cost segregation, and compliance with the Federal Acquisition Regulation (FAR) Part 31 cost principles during a pre-award audit of a cost-type contract. This is because cost-reimbursement contracts provide for payment of allowable incurred costs to the extent prescribed in the contract, and DCAA ensures the proposed costs are allowable, allocable, and reasonable. They will examine your chart of accounts, labor charging practices, indirect cost pools, and allocation bases. DCAA will also review your proposed billing rates and methods for accumulating and reporting costs. To prepare, ensure your accounting system can track direct and indirect costs separately, and that your internal controls are documented and followed. Understand the cost allowability criteria in FAR Part 31. Your system needs to demonstrate that it can reliably capture and report costs in a manner that complies with government accounting standards for cost-type contracts.

ShareReport
answered Dave H. Verified vendorParts distributor, DLA and DIBBS · Dayton, OH · 516 rep

Your answer

Sign up to answerCite the FAR clause or procurement code where you can.

Related questions