Increase Your Ability to Compete for Government Contracts

For the most part, contractors are subject to the Contract Cost Principles and Procedures established in the Federal Acquisition Regulation (FAR) Part 31.
What does this mean to you?  If you have a proposal or contract subject to cost analysis or cost determination, your accounting system’s ability to estimate, accumulate and allocate costs must meet the principles and procedures set forth in FAR Part 31.

These principles and procedures address the pricing of contracts, subcontracts, and modifications to contracts and subcontracts; and the determination, negotiation and the allowance of cost.

If your system does not meet these principles and procedures, your ability to compete for government contracts and to recover cost incurred on government contacts would be significantly limited.

The professionals at TD Government Solutions have the expertise to evaluate your system’s capabilities to meet the principles and procedures established in FAR Part 31 as they relate to:

  • Accumulation and allocation of Direct and Indirect costs
  • Indirect rate development and review
  • Unallowable cost reviews
  • Reporting of cost incurred.

Accumulation and Allocation of Direct and Indirect Costs

The proper treatment of cost is key to the recovery of cost incurred on a contract.
A system that is not designed to identify, accumulate and allocate cost accurately and, according to the principals and procedures established in the FAR and Cost Accounting Standards (CAS) can result in a significant portion of recoverable costs being treated by the Government as unrecoverable.
A non-compliant accounting system equals lost dollars.

The professionals at TD Government Solutions have extensive experience in evaluating existing accounting systems for compliance with; and developing and implementing accounting system that are compliant with the principles and procedures established by the Government. We work closely with our clients to ensure that their system not only meets their needs but also is compliant with applicable rules and regulations.

Indirect Rate Preparation and Review

Organizations that receive and administer government funding are often required to obtain an approved indirect (overhead and general & administrative) cost rate in order to be reimbursed for indirect expenses related to government grants, contracts, and other procurement instruments. To complete the approval process, the organization must submit a proposal to the appropriate agency and then successfully negotiate the terms of the rate agreement. For both new awardees and experienced government contractors, this process can be challenging and complex and can divert critical resources from ongoing operations.

TD Government Solutions has the resources and skills to support your organization through all aspects of the rate preparation and negotiation process. Our staff has assisted clients subject to OMB circulars, Federal Acquisition Regulations, Cost Accounting Standards and various state and local government regulations. We routinely provide indirect rate services to leading civilian and defense contractors.

Unallowable Cost Reviews

It is a well known fact that all government grants, contracts and other funding methods include unallowable cost provisions. Whether your organization is subject to one of the OMB Circulars, the Federal Acquisition Regulations, or other similar state and local rules, certain costs will be unallowable or otherwise limited for reimbursement.

While these costs are often legitimate and necessary business expenses, their inclusion in indirect or incurred cost submissions, billings and public vouchers may result in refunds of previously recovered costs, suspension of contract financing and possible fines and penalties.

Certain types of unallowable costs are easily identified. These include alcoholic beverages, bad debt expense, lobbying, etc. Other costs may not be readily identifiable in accounting records or may be subject to limitations and specific accounting treatment.

TD Government solutions staff are experience auditors and are knowledgeable of the provisions affecting the allowability of costs for civilian and defense contractors.

Reporting Cost Incurred

Whether it's almost time to submit your indirect rate proposal or incurred cost submission, or you are still in the planning phase, a diagnostic review is a cost-effective way to help make sure your rate is compliant and fairly represents your cost recovery.
Diagnostic reviews are typically an on-site, focused analysis of an indirect rate calculation and supporting documentation. These reviews are valuable as a means of assessing compliance with applicable laws, regulations and agency policy. A major benefit of the diagnostic review is that the recommendations we provide often result in enhanced indirect rate calculations and help facilitate your organization's rate negotiations.

The diagnostic review is focused on direct and indirect cost recovery and compliance through:

  • Determining the quality of data and allocation statistics
  • Identifying alternate methods of allocation
  • Analysis of cost pool and allocation bases
  • Reviewing the treatment of "hot" negotiation/audit issues
  • Reviews for unallowable costs
  • Reviews for consistency with cost disclosures requirements

Indirect rate submissions require a certification by a senior responsible officer. Our diagnostic review helps the organization minimize risk accompanying this process and assists in defining your negotiation strategy. Our proven approach will help your organization achieve its goals and optimize indirect cost recovery.

TD Government Solutions has the resources ready to perform a diagnostic review for your organization when you need it. Please contact any of our professional staff to discuss our approach.