{"id":1668,"date":"2023-06-19T09:30:28","date_gmt":"2023-06-19T13:30:28","guid":{"rendered":"https:\/\/www.diener.org\/?p=1668"},"modified":"2023-06-20T20:50:08","modified_gmt":"2023-06-21T00:50:08","slug":"managing-your-subcontractors-government-compliant-incurred-cost-submissions","status":"publish","type":"post","link":"https:\/\/www.diener.org\/managing-your-subcontractors-government-compliant-incurred-cost-submissions\/","title":{"rendered":"Managing Your Subcontractor’s Government-Compliant Incurred Cost Submissions"},"content":{"rendered":"

\"governmentGovernment contracts<\/a> come with many compliance requirements, and managing subcontractors is a critical area contractors must be aware of. Subcontractors play a significant role in the success of any government contract and as a prime contractor, you are responsible for your subcontractors complying with the applicable rules and regulations.<\/p>\n

Recently, the Defense Contract Audit Agency (DCAA) issued a notice stating that there will be more emphasis on subcontracts, specifically reviewing policies and procedures related to subcontracting. This article will discuss the importance of managing your subcontractor’s government-compliant incurred cost submissions and how we can help you stay compliant.<\/p>\n

The Importance of Incurred Cost Submissions<\/h2>\n

Incurred Cost Submissions<\/a> are an essential component of government contracting. It is an annual report that contractors must submit to the government to support the indirect costs claimed on government contracts. The incurred cost report must be submitted within six months from the end of a company\u2019s fiscal year per FAR 52.216-15<\/a>.<\/p>\n

As a contractor, you must submit an accurate and complete Incurred Cost Submission. Failing to do so can lead to delayed payments, loss of contracts, and even legal issues. Furthermore, the government can disallow claimed costs not supported by the Incurred Cost Submission, leading to significant financial losses for your business.<\/p>\n

Managing Your Subcontractor’s Incurred Cost Submissions<\/h2>\n

If you have subcontractors working on a government contract, you are responsible for their submission of an Incurred Cost Submission. The prime contractor can require the subcontractor to submit the Incurred Cost Submission to them or the Administrative Contracting Officer (ACO).<\/p>\n

To ensure that your subcontractors submit their Incurred Cost Submissions on time and accurately, it is imperative to have a proper management system in place. This system should include policies and procedures that comply with government regulations.<\/p>\n

Reviewing Your Policies and Procedures<\/h2>\n

As a government contractor, your organization must have proper policies and procedures related to subcontracting. For up to date compliance, you may need to review those existing policies and procedures on an established basis. This review should include a thorough analysis of your documentation related to subcontractors and the control of subcontractors.<\/p>\n

Contractors should also review your procedures for monitoring subcontractors to ensure they meet all government contracting compliance<\/a> requirements. This may include reviewing subcontractor proposals and invoices, confirming that subcontractor costs are allowable and allocable, and monitoring the progress of subcontractor work.<\/p>\n

Once you have reviewed your policies and procedures related to subcontracting, you may need to make updates or revisions for compliance with government regulations. This may include developing new policies and procedures or updating existing ones to address gaps or deficiencies.<\/p>\n

Finally, it’s essential that all employees are trained on the new or updated policies and procedures related to subcontracting. Doing so will help ensure that everyone knows the proper procedures and requirements related to government contracting compliance.<\/p>\n

Preparing Your Incurred Cost Submission<\/h2>\n

Preparing the incurred cost submission can be daunting, but is an essential part of government contracting compliance. The Incurred Cost Submission is a report that contractors must file annually with the government to provide detailed information about their costs incurred on government contracts.<\/p>\n

To prepare the Incurred Cost Submission, collect and organize significant data related to your government contracts. This data can include information about direct and indirect costs, labor hours, subcontractor costs, overhead rates, and more. This information must be accurate and complete to avoid costly mistakes.<\/p>\n

One of the key reference materials for preparation is the Federal Acquisition Regulation (FAR)<\/a> and other government regulations related to government contract cost accounting<\/a>. Doing so will give you a much better understanding of the requirements for your submission and help you avoid errors.<\/p>\n

Once you understand the requirements properly, you can begin collecting and organizing your data. This may involve reviewing financial records, payroll information, subcontractor agreements, and other documentation related to your government contracts.<\/p>\n

You may need to reconcile financial records, verify labor hours, and review subcontractor costs to ensure that they are allowable and allocable.<\/p>\n

Finally, you will need to prepare your Incurred Cost Submission report which will typically include multiple schedules detailing your costs and overhead rates. This report must be well-organized and easy to follow, with all required information included.<\/p>\n

Get Expert Assistance In Maintaining Compliance<\/h2>\n

If you need assistance managing your subcontractor’s government-compliant Incurred Cost Submissions, or reviewing your policies and procedures related to subcontracting, Diener & Associates can help<\/a>.<\/p>\n

Our team of experienced CPAs<\/a> can give you the guidance and support you need to maintain compliance with government regulations, Incurred Cost Submissions and subcontractors. Contact Diener & Associates<\/a> today to learn more about our services.<\/p>\n","protected":false},"excerpt":{"rendered":"

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We discuss the importance of managing your subcontractor’s government-compliant incurred cost submissions and how to stay compliant.<\/p>\n<\/div>\n

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Read More<\/span> <\/i><\/span><\/a><\/p>\n<\/div>\n<\/div>\n","protected":false},"author":13,"featured_media":1669,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-1668","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-government-contract-consulting","8":"entry"},"acf":[],"yoast_head":"\nManaging Your Subcontractor's Government-Compliant Incurred Cost Submissions<\/title>\n<meta name=\"description\" content=\"We discuss the importance of managing your subcontractor's government-compliant incurred cost submissions and how to stay compliant.\" \/>\n<meta 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