Many indicators point toward the Defense Contract Audit Agency (DCAA) organizing to reduce the backlog of Incurred Cost Proposals (ICPs) submitted by contractors having cost-reimbursable type contracts. While auditing large prime contractors is a stated priority, we anticipate a flurry of audit activity descending upon smaller contractors some time in 2012.

ICP Requirements

As a reminder, *ICPs are required per contract clause FAR 52.216-7 Allowable Cost and Payment. Paragraph (d)(2) of the clause specifies this proposal is due to the Contracting Officer (or cognizant Federal agency official) and auditor within six months following the expiration of a contractor’s fiscal year. Paragraph (d)(2) also articulates the mandatory and discretionary data to be submitted. The DCAA publishes a template that can be used for this purpose, although we generally advise against it.

It’s never too early to get a head start! There are a number of ways you can be proactive! 

• Call Tech BizSolutions today at 303-867-8125, for a free evaluation!
• Download and review any of our free Incurred Cost checklists on this and other related pages.
• Send us an email that includes some basic information: your company's size, number of employees,number of government jobs and type of contracts, the type of accounting software you use, whether or not you did provisional rates last year, and the type of rate structure you've used in the past (1, 2 or 3 rate system).

For additional guidance, go to:

How to prepare your ICP

Submitting your ICP

Preparing for a DCAA ICP audit

*ICP is also known as an Incurred Cost Estimate (ICE) or a final indirect cost rate submission.