Incurred Cost Submissions: Using Costpoint to Overcome the Most Noted DCAA Inadequacies
By Crystal Dewey, Manager, Industry Specialty Services, BDO
If you have a federal contract or grant, you will probably be creating an Incurred Cost Submission (ICS). The ICS is also known as the indirect cost rate submission, final indirect rate proposal, incurred cost electronic submission (ICES), or incurred cost proposal (ICP). Look for the Federal Acquisition Regulations (FAR) FAR 52.216-7 Allowable Cost & Payment Clause, which requires that you submit an incurred cost proposal within six months of the end of your fiscal year. The Preparing Incurred Cost Submissions: Government Contractor’s Overview webinar addresses the potential consequences of failing to meet that deadline. Regardless of the name, the purpose is the same - to true up your actual indirect cost to the indirect cost provisionally billed for in the last contractor fiscal year. The overarching goal is to demonstrate that costs are reasonable, allocable, and allowable in compliance with GAAP, CAS, FAR, and contract provisions.
The webinar reviews each of the ICS schedules and their reconciliation points in more depth. It also addresses which schedules, required and supplemental, may not have to be completed with the ICS submission, and what constitutes an adequate submission. Please refer to the DCAA ICS Adequacy Checklist for internal review prior to submission. The rates that are developed from this submission are typically the starting point for calculations such as Provisional Billing rates, Forward Pricing rates, etc.
Per GSA, there has been no “blanket extension” of time for government contractors to submit incurred cost filings due to the COVID-19 pandemic. Unless a specific extension of time is requested in accordance with the Federal Acquisition Regulations (FAR), contractors will be expected to file in accordance with contract terms and conditions, specifically the allowable cost and payment clause 52.216-7.
BDO assists clients with Costpoint system setup, preparation, review, and DCAA audit defense of incurred cost submissions. BDO’s unparalleled experience includes long-time consultants, former government officials (e.g. Contracting Officers and Auditors) and Industry Leaders that provide contractors with insights to help mitigate the risk of non-compliance with government contracting regulations. BDO’s ERP team combines that pool of knowledge with their experience in system configuration, implementation, and utilization.
Deltek Costpoint, known as an industry leading ERP system for government contractors, has managed the information that contractors need to prepare ICS reports for the last four decades. User permissions limit access, posting and processing while built-in systematic controls over cost accumulation safeguard against improper recognition. Costpoint provides reporting efficiency with canned reports like the Statement of Indirect Expenses that can be reviewed monthly or quarterly to improve accuracy and prevent surprises in the annual ICS preparation. Customized reports (i.e., Costpoint BI, CER, Cognos) can also be leveraged to prepare the ICS and reconcile it to financial and project records. These tools provide significant time savings and confidence, allowing Costpoint clients to efficiently manage a difficult process that can span several months into a process of weeks or even days, depending on the complexity of a company’s incurred cost submission.
About the Author
Crystal has twenty years of combined asset management, cost accounting, financial reporting and government contract compliance experience. Within the Textiles and Government Contracts Industries, she has also performed in Purchasing, Inventory, Shipping, Asset and Depreciation Valuation, Accounts Receivable, Accounts Payable, Timekeeping, Payroll, and Internal and External Audits including Property Tax and Sales and Use Tax Audits.