For the serious small government contractor  

COST & PRICING DVD

Greetings, 

If you are reading this then you are making it through winter and it will be spring soon.  Soon there will be talk of how hot and muggy it is.  We are creatures that are hard to love and harder to please.  But we do love and we do try to please.

In this newsletter I address several issues that I have been hearing much about and you probably have too.  Government shutdown looming, DCAA versus DCMA, Fewer Audits due to higher thresholds, and others.   So I did some research on selected items and offered my humble opinion and insight for your quiet contemplation.......but first, hear me out on an observation: 

Are you experiencing Information overload?  It's everywhere.  More information, Faster Information, Quicker This, More of That, and it just keeps on coming. 

Have you noticed the cycle of things?  Mobile phones started out large, then got ever smaller and smaller, then crept back up in size until they got larger (but thinner), and then on to the Ipad size devices.

Haven't you noticed that your sights and senses are bombarded constantly?  Our youth don't even know how to relax.  How would they, or even you, respond to sitting quietly for 20 or 30 minutes and just enjoying silence or quiet conversation without "ANY" distractions?

It is the age that we are in and there are so many positive things about technology.  We must just remember to keep control of it and not the opposite. 

Take time, regularly, and not just on vacation, to slow down, and give your mind some peace.  Just as our muscles need time to recover after exercise, so does our mind need to pull away and decompress.  It's easier said then done, but I was asked to share this especially with you, so I have.

Hope to see you, or your representative, at our next workshop March 23-24!  Or Maybe I will be talking to you on DVD.....smile

Enjoy this issue

Paul Sr. 

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Government Shutdown?  Maybe - As a contractor, some thoughts and issues to consider now and for the future!

The link below is to an article I discovered during my research on this issue.  It will provide some insight from a contractors point of view and identify several issues and questions to consider prior to the possibility.  If the shutdown is avoided, this article should provide some guidance for future reference.  You can choose some of the options to incorporate into your Policies.

follow this link for article 

The Relationship Between DCAA and DCMA 

Paul Sr. recommends this as a must read!

I'm hearing and reading more about DCAA versus DCMA.  The legality of the FAR is daunting and oft-times takes significant judgement and experience in determining how to apply the guidelines based on Intent versus Letter of the law. 

There even appears to be conflict between DCAA and DCMA application of missions!

• What are the missions of each?
• Who has the authority for making the decision on a small businesses ability to perform? 
• Who determines if a cost is allowable or not? 
• Who else can override an Auditor or Contracting Officers decision that your accounting system is inadequate? 

In my opinion, this article has an excellent explanation of these and related issues and is a must read for every small business contractor.  

This article alone might be worth the annual subscription!  So, this article is out on the honor system and if you agree then you decide if you will join our online community.  There is a companion article in this issue on DCAA and audits that you should also read.

follow this link for article 

Is DCAA Saying No More Audits under $10 Million?  That's What I'm Hearing.  Beware!

No More Audits? Yea, Right.  Fewer Audits, Maybe. 

There appears to be a shift from DCCA audits of proposals to DCMA under what is considered field pricing assistance or analysis typically performed by their price/cost analyst. 

Bear in mind that they all generally follow the guidance under FAR on cost and pricing.  And if someone wants to have you audited, you will be! 

Just a note of caution for those who may think they don't have to move forward to meet requirements due to new thresholds.  You will want to read this entire article.  It is very informative!

follow this link for article

DCAA Sample Statement of Condition and Recommendations

Over the years I have encountered many instances of DCAA auditors finding significant deficiencies of small businesses as it pertains to written policies, procedures, and practices.  The following sample of a typical standard wording in an audit report of finding is presented for your understanding.  Remember, being prepared is better than hoping issues won't apply to you. 

Auditor Condition Finding: Contractors cost accounting systems written policies, procedures and practices have significant deficiencies which do not meet the requirements of FAR 53.301-1408.  The policies and procedures do not identify exclusion of unallowable costs (FAR 31.201-6) and the proper segregation of direct costs from indirect costs (FAR 31.203(c)).  Further, written policies and procedures do not document the composition of its indirect expense pools and the allocation bases.  Adequately written policies and procedures are necessary to provide clear directive, reliance, and consistency. 

Auditor Recommendations: Contractor must have all policies and procedures in written format.  In addition, contractor should become familiar with FAR Part 31 expressly unallowable costs as identified in FAR Part 31.205 and identify, segregate and exclude unallowable costs.  The policies and procedures must require that transactions are screened for allowability at the time of original entry into the accounting records.  Contractor must also create accounts for accumulating indirect expenses to ensure compliance with the requirements of FAR Part 31.203(c), and must establish written policies and procedures documenting the composition of its indirect expense pools and allocation bases.

All of the above are the very issues we cover in our workshop, DVD, and policy manual template.  These are practical, applicable, and meaningful tools critical to small business contractors.