Are You Ready for a DCAA Audit?

Do you have a Contracting Officer that would like to verify your accounting system meets the government requirements? Are you ready for the resulting DCAA audit? This checklist will help you determine if you are ready for the audit.

I am a ...


Prime Contractor Proposing to Government (non-SBIR)

Our objective with Government Contractor clients who are non-SBIR awardees is to provide skilled services that result in savings to the company and to provide services that company personnel are not capable of executing successfully. The typical services we provide involve our expert knowledge of the Government procurement system, the Federal Acquisition Regulations, and the interface of the FAR and commercial law in subcontracts. The services that you will find useful depend on your in-house capabilities and on your level of awareness of the nature of the Government procurement system.

Below are the typical issues and needs we encounter with our small business Government contractor clients. If you have other concerns, we are glad to help with those also.


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SERVICES


Tech Biz Provides:

Financial and corporate strategy involving the U.S. Government as a customer

Successful contracting with the U.S. Government requires understanding the governments special requirements caused by its responsibility to its citizens. Commercial business does not have this responsibility. We provide you with the advice and guidance appropriate for you unique product and services. We will help you maximize your profit in this environment. A review of your firm’s capabilities and strategy will reveal hidden opportunities and obstacles to higher profits and sales.

A synopsis of our services are presented below.

  • Contract Management - Government contract management services during contract performance.
  • Budgeting - Planning and Preparation of annual budgets and negotiation of indirect rates
  • Audits - Resolving NIH and DCAA issues and interfacing with their auditors
  • Actual Indirect Rates - Calculation of monthly indirect rates with your accounting software
  • Accounting - Monthly financial statement preparation with fully burdened job costs and indirect rates
  • Integrated Manufacturing Control Systems - Selecting and installing manufacturing floor inventory and government approved cost accounting systems
  • Proposals - Organization, costing and pricing assistance of your proposals
  • Negotiations - Direct or assistance in negotiation with the contracting officer
  • Fraud - Setting up procedures to protect your company from being accused of fraud by the federal government.
  • Subcontracts - Preparation of legal subcontract structure, terms and conditions and Government flow downs

 

 

The following descriptions provide additional insight into understanding our services and products.


Proposal Costing and Pricing Including the Development of Indirect Rates

Our Non-SBIR clients often have been exposed only to fixed price competitive bids from the Federal Government. If this is the case for you, when a negotiated procurement comes along, you will need to understand the consequences of indirect rates such as Overhead and General & Administrative (G&A). This is a critical factor in pricing a government contract or grant proposal and can affect your business for years to come. We know how to develop and use these rates to properly set up your business for success and a profitable future with Government contracting. Often times we find that our clients have not properly developed their indirect rates. If you have this problem and it is not corrected, you will be doomed to years of losses and restricted growth. We fix this for you.

Typical cost: $2,000

Potential gain or savings: $10,000 (single contract/grant)-$1,000,000 (over several years)

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Federal Government Contract Negotiation

Getting the best deal you can is the goal of any successful small business. We negotiate proposals and contracts in order to maximize price, protect intellectual property and data, and substantially increase the probability of successful contract completion. We also analyze the impact of specific government terms and conditions and provide a written review to help you and your personnel understand obscure contract requirements.

Typical cost: $3,000

Potential gain or savings: $10,000-$100,000 (depending on contract size)

Proposing and managing the negotiation of technical and production changes

Change management is crucial to managing government contracts. Even the most benign request to change contract terms or performance can have a dramatic financial or legal impact if not adequately addressed. We understand government contracting rules and can package, price, and negotiate contract changes that are “fair and equitable.”

Managing the financial aspects, the legal language and flow downs and the type of subcontracts on for a prime contract

Small businesses awarded large prime contracts for the first time may be surprised by the amount of time and special skills needed to manage large subcontracts. Government oversight and clauses on your contract applies in many areas to your major subcontractors. Managing the technical and financial performance of your subcontractors can become complex and challenging in the government contracting environment. We can help unravel and make sense of the complexity you will undoubtedly experience.

Federal Acquisition Regulations (FAR)

If you have questions about these regulations, we are familiar with the FAR and are knowledgeable of the numerous interpretations Contracting Officers and the DCAA employ.

Typical cost: $300

Potential gain or savings: $500- $ 100,000

Intellectual Property Rights with the Federal Government

Our clients having Government research contracts often do not know the methods available to preserve their intellectual property when dealing with the Federal Government. The development and protection of intellectual property is one the most important assets a small research company can preserve. We know how to get maximum your protection.

Typical cost: $450

Potential gain or savings: $100,000-$500,000

Contracting Office interface and management

We understand and anticipate the needs of the various government contracting offices that will manage your contract. We employ an active listening and collaborative style to respond to your customer's requirements. Not all contracting officers or government agencies are created equal, meaning while meeting the intent of Federal Acquisition Regulations (FAR), they may impose their own interpretation of contracting rules. We have the experience to understand these variations of interpretation and get the best interpretation for your company.

Typical Cost: $400 (per incident)

Potential Gain of saving: $0-$100,000 (depending on the contract size).

These are the typical issues we encounter with our small business Government contractor clients. If you have other concerns, we are glad to help with those also.

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Detailed Company-Wide Budgeting

We offer a detailed budgeting system using Microsoft excel. This budget provides month by month tracking and calculates the projected month and year end indirect rates. This enables your top management as well as project managers to develop coordinated plans that support the company’s sales, profit and indirect rate goals. It also provides the indirect rate billing proposal to submit to the DCAA each year.

Typical cost: $1,999

Potential gain or savings: $10,000- $100,000 (depending on company size)

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Accounting

Review and Installation of Accounting Systems

Installation of manufacturing control systems

Companies are realizing more and more that in order to maintain a competitive advantage they must have an automated system for tracking the cost of running their manufacturing operation. Government contractors are in the challenging position of being required to use approved accounting systems that make finding their manufacturing cost tracking software even more difficult. We help your company find and implement the right system for your accounting, manufacturing and inventory control needs. We have invested significant time and resources in evaluating manufacturing solutions that will integrate with your current accounting system. For growing manufacturing companies that require sophisticated integrated ERP system, we have identified solutions that can meet your advanced manufacturing and accounting needs. We handle selection of manufacturing and accounting software, definition of software requirements, on-site installation and implementation. In addition, we evaluate shop floor and current inventory layouts and make recommendations that will increase the efficiency of an operation by 20% or more.

Typical cost: $2,500 (does not include software)

Potential gain or savings: $10,000-$500,000, (savings will be relative to the size of the organization)

Interfacing manufacturing control systems and Government approved accounting systems

As manufacturing companies grow, it is often necessary to bill the Government based on actual percent complete and monthly incurred cost (known as progress billings). When working with the Government, progress billing opens the door to Government industrial specialist and DCAA audits. During an audit, it is necessary to have your inventory system organized in a way that is acceptable to DCAA and your industrial representative. In conjunction with your cost accounting system, inventory transactions must be well documented from quote, to purchase, to receipt of material, issue to job, to work in process, to finished goods and finally shipment. Traceability both systematically and physically is paramount. We know how to identify accounting/manufacturing systems and physical inventory methods for our clients. We can help you set these controls in place when your company is audited and for improved manufacturing traceability and efficiency.

Typical cost: $2,000

Potential gain or savings: $10,000-$750,000 (depending on company size and contract value)

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Getting Defense Contract Audit Agency (DCAA) approval for you accounting system

The Government requires approval of your accounting system before you can receive cost reimbursable contract. They require that you describe the system in detail either in person or by phone and that you demonstrate (with our help if you need it) that you can operate the system consistent with Government regulated accounting procedures. Government accounting rules are very different from generally accepted accounting principles used in commercial business. Interacting with the DCAA is very confusing to accountants and non-accountants not used to the methodology of Government auditors. We will assist you or deal directly with the auditors for you.

Typical cost: $2,000

Potential gain or savings: $10,000 to $100,000 (depending on contract value)

Proposal Audits by the (DCAA)

The Government contracting officer almost always requests that DCAA review proposal cost to verify that proposed costs are reasonable and allocable for negotiated contracts. This review, or audit, is often conducted as an on-site visit by a DCAA auditor who asks for information (such as indirect rates backup). The audit typically causes great concern for our clients and, unless we can intercede on their behalf, sometimes results in the decrease in the price of our client’s proposal. We know how to deal with the DCAA to get your full proposed price.

Typical cost: $1,000

Potential gain or savings: $10,000-$75,000

Incurred Cost Proposals and Audits by the (DCAA)

If you have a cost reimbursable contract or grant, it contains a clause that requires you to submit your actual indirect rates to the DCAA after the completion of each fiscal year. The ensuing audit is usually conducted as an on site visit by a DCAA auditor who asks for information (such as invoices and time cards for actual cost incurred for backup). The audit typically causes great concern for our clients. This audit either results in the partial refund of our client’s paid invoices to the Government or a substantial amount of money owed by the Government to our client (usually many months or years after the money could have been collected). If you do not know the cost principles in FAR, you can be penalized for proposing costs that are explicitly unallowable. This is often over $10,000. We know how to deal with the DCAA to keep your refunds to a minimum and expedite your potential collections.

Typical cost: $3,000

Potential gain or savings: $10,000-$100,000 per Contract (depending on contract value)

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Establish and Negotiate Indirect Rates

Indirect rates are very important to your company’s future. The Government will reimburse you for all reasonable costs incurred to make your business successful. We can coach you through the process (or do it all for you if you wish) of creating a budget to enable you to understand the type of cost necessary to grow your company, and to deal with the Government in a manner they understand.

Typical cost: $2,000

Potential gain or savings: $10,000-$100,000 (over several years)

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PRODUCTS


Accounting Software for Government Contractors

SBIR Accounting Software-accounting on the web

Using QuickBooks Pro® to enter direct and indirect costs, our GovCalc accounting program processes data for operational and government accounting purposes.

The Web-based government product includes:

  • Project burdened cost reporting
  • Indirect rate calculation
  • Chart of accounts structured to meet the Federal Acquisition Regulations
  • A financial management tool
  • Profitability on current contracts
  • Financial position of the company

How the web based accounting system works:

  • Process the following monthly information on your current QBP file
  • Accounts payable and Cash out
  • Accounts receivables and Cash in
  • Reconcile your cash accounts
  • Time charges (direct and indirect)
  • Submit your QuickBooks file via email or hosted solution
  • Tech BizSolutions will email the financials (adobe file)
  • Print your financial statements

Contact us for a free demonstration

Watch the free Intuit Marketplace Webinar - Scroll down to (Government Contract Management)

Download the Tech Biz NDA, sign, then fax to 720-494-8402 along with your order for our GovCalc template and accounting manual. Please include your contact information with your request.

Price for template = $349

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Budget Templates

Our budget model will create a complete annual company budget by month and develop indirect rates suitable for your business both for the Government sector and the commercial sector. However, more important, it will allow you to understand the financial aspects and dynamics of your business. This model presents cost projections in a format designed for the DCAA and other Government agencies as well as a format that management can use.

Deltek Partner

Tech BizSolutions is a Deltek Parner, authorized to sell, install and provide operational support for GCS Premier ® software.  GCS Premier ® is specifically designed to meet all the FAR and GAP requirements required in government contracting.  This software is considered the "gold standard" by many government agencies.  Deltek Partner

Digisoft Solutions reseller

Tech BizSolutions is an approved reseller of Digisoft Solutions business management software. The Digisoft solution affordably expands the utility of QuickBooks to include:

  • DCAA compliant web-based timekeeping
  • DCAA compliant job cost and indirect rate reporting
  • Bid & proposal planning, pricing
  • Material and property management
  • Contract & project management
  • Expense management

Contact us at 303-443-4440 for a free demonstration.




We are a full-service consulting and accounting firm supporting government contractors of all sizes nationwide.

For immediate attention, please call Mike Anderson at 303-443-4440, 125 or
email manderson@techbizsolutions.com.


Tech BizSolutions, Inc.
5710 Flatiron Pkwy., Ste B, Boulder, CO 80301
303-443-4440 or email info@techbizsolutions.com
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