Keeping Compliant With Deltek For Government Contracting
“More than half of Americans either own or work for a small business, and they create about two out of every three new jobs in the U.S. each year.” – U.S. Small Business Administration
For any small business looking to stretch their legs and apply their entrepreneurial prowess within the realm of government contracting, it’s important to take a beat and consider the state of their back office. In recent years, Cost Accounting Standards (CAS) requirements have transitioned from an occasional compete requirement to a consistent inclusion for contracts of every type and size. And, it’s not just the back office for prime contractors that needs to adhere to CAS requirements, subcontractors have to be at the ready as well.
As defined in the Deltek white paper Understanding the Basics of FAR and CAS, CAS is a “set of standards and rules established by the federal government to help achieve uniformity and consistency in the cost accounting principles within federal contracting. CAS also sets forth regulations that require contractors to disclose their cost accounting practices, to follow the disclosed practices consistently, and to comply with specified standards.”
Stated more succinctly, CAS is all about “allocability”—how you charge to contracts, what is charged and to which contract, how an accounting system should be maintained, how to account for certain types of costs and how those costs then flow down from an incursion to a final cost.
Currently, contractors can expect 19 standards housed with a CAS requirement. Some contractors are subject to full CAS coverage, while others will encounter modified CAS coverage or can be exempt all together. Full CAS coverage can be applied to awards of $50 million or more, including optional amounts. Modified CAS coverage can be applied to awards from $75 million to $50 million. CAS exemptions can be applied to awards like sealed bid contracts or contracts and subcontracts with small business concerns.
Overview of Standard Types and Disclosure Statement Inclusions
Contractors who encounter a CAS requirement will be exposed to a variety of standard categories. Some of these categories include:
- Consistency standards
- General standards – such as unallowable costs
- Standards in cost allocation
- Standards on property
- Standards on compensation
- Cost of money standards.
Documentation is supremely important when it comes to CAS requirements. It is generally not a difficult process, but it can be time consuming. A disclosure statement should include:
- General information
- Direct costs
- Direct vs. indirect costs
- Indirect costs
- Depreciation and capitalization practices
- Other costs and credits
- Deferred compensation and insurance cost
- Home office expenses.
Having a back office management system that can easily surface this information and be relied upon to automatically produce a variety of reports for compliance purposes can make disclosure statement submission a much smoother and efficient process.
Deltek’s white paper Understanding the Basics of FAR and CAS is a comprehensive introduction to what small businesses need to know about getting their back offices in order, and how a CAS compliant solution like Deltek Costpoint can make them immediately competitive in the government contracting space. It provides additional resources on the standards and disclosure statements required for CAS adherence, as well as an overview of the “allowability” addressed within the Federal Acquisition Regulation (FAR), such as what you can charge to the government and what you cannot.
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