“Is my company required to submit an Incurred Cost Proposal to DCAA?”
We hear this question all the time, and not everyone likes the answer! Here’s what Sona Noss, VP of Accounting at The McKelvey Group says about it.
The bottom line is that if any of your contracts contain FAR Clause 52.216-7, Allowable Cost and Payment, you are required to submit a final Incurred Cost Proposal within six months after the close of your fiscal year. This is a contractual requirement, regardless of the type of contract that you have. So even if you have a fixed-price subcontract with a prime, watch out! Often, a prime contractor with a cost-type or T&M contract with the Government will issue a fixed-price contract to a small business subcontractor. If the subcontract includes the FAR clause as a flow-down provision, this contractually requires that the subcontractor submit an Incurred Cost Proposal. The best way to ensure that you will not be penalized by the Government is to review each of your contracts to see if FAR Clause 52.216-7 is included in the Contract Clauses (generally Section I). And if one does, submit your Incurred Cost Proposal for each year of your contract/subcontract, even if you are past the first fiscal year.
Sona Noss, VP of Accounting Solutions for The McKelvey Group, is responsible for managing the finance and accounting operations for clients in various industries, primarily Government contractors. Her expertise lies in Government compliance, including analyzing accounting structures, creating and implementing policies and procedures, and preparing financial reports. A seasoned professional and holding a long-standing tenure with TMG, Sona also has comprehensive experience with cost volume responses to Government requests for proposals and demonstrates a strong understanding of FAR and DCAA regulations. Click the link below for more blog posts by Sona.