2016 National SBIR/STTR Conference The views expressed in this presentation are DCAA's views and not necessarily the views of other DoD organizations

Page | 2 Defense Contract Audit Agency Approximately 5,000 employees located at over 300 offices throughout the United States and overseas Responsibilities and Duties: Perform all needed contract audits for DoD Provide accounting and financial advisory services to DoD (and civilian when requested) acquisition and contract administration components during all contract phases: Preaward Contract execution Settlement (contract closing)

DoD SBIR/STTR Contracts Phase I (FFP up to $150,000) Preaward Accounting System Audit NOT required Proposal amount is under audit threshold amount Annual Incurred Cost Submission NOT required Phase II (Cost-Type up to $1 million) Preaward Accounting System Audit required Proposal amount is under audit threshold amount Annual Incurred Cost Submission required Page | 3

Page | 4 Accounting System Requirements

Solicitation FAR requires prior to award of a cost reimbursement contract, the contractor’s accounting system be adequate No FAR requirement that the accounting system already be audited and deemed adequate in order to submit a proposal Page | 5

Page | 6 Prior to Contract Award Contracting Office or DCMA conducts Preaward Survey to consider responsibility of prospective contractor Design of the Accounting System is part of the Preaward Survey (SF 1408 Criteria) DCAA requested to evaluate design of Accounting System

Page | 7 Preaward Accounting System Audit Evaluates design of Accounting System to determine if it is acceptable for prospective contract DCAA or Buying Command will request contractor complete DCAA Preaward Accounting System Checklist Contractor should be prepared to demonstrate how accounting system satisfies SF 1408 criteria at initial meeting

Based on SF 1408 criteria Generally used by contractors new to government contracting that the Government plans to award a cost type contract (cost reimbursement contracts, or for contractors that will receive progress payments based on cost) Assesses whether the requirements for an adequate accounting system have been met Page | 8 Preaward Accounting System Checklist DCAA : Celebrating 50 Years of Excellence

Issue report to Contracting Officer with an opinion that the accounting system is or is not suitably designed, in all material respects, for award of a prospective contract Includes a completed SF 1408 An opinion that the system is not suitably designed means that the contractor cannot be awarded a cost type contract. The award will be delayed until corrective action is taken and a follow-up audit can be performed Page | 9 After the Audit is Complete DCAA : Celebrating 50 Years of Excellence

Page | 10 Incurred Cost Submissions

Page | 11 Due Dates of Submissions Incurred cost claims are due six months after completion of the contractor’s fiscal year end Per the Allowable Cost and Payment Clause (FAR (d)(2)) Allowable cost and payment clause applies to cost-reimbursement type contracts (FAR )

Page | 12 Public Vouchers

Page | 13 Public Vouchers Cost type contracts provide for interim payments for costs on a Standard Form (SF) 1034 public voucher or equivalent. DCAA will perform voucher reviews based on risk. Fixed price contracts are subject to FAR Part 32 financing methods.

Contractor Responsibilities Contact the cognizant DCAA office after contract award Ensure DCAA has the necessary information to process contract billings, such as current provisional billing rates, copy of the contract, any special contract provisions, etc. Maintain adequate billing system internal controls Ensure adequate support is maintained for amounts billed Submit timely incurred cost proposals and final vouchers in accordance with FAR Page | 14

DCAA Guidance on Billing Oversight Page | 15 Revised guidance on billing oversight and modified the risk-based approach for selecting interim public vouchers for review Revised risk-based approach for selecting interim public vouchers at low-risk contractors Revised procedures for paid voucher review (1 voucher per year for non-majors) Improve consistency and efficiency and satisfy DCAA’s responsibility under FAR/DFARS

Page | 16 Internet Resources

Page | 17 DCAA Internet Resources Audit Process Overview – Information for Contractors Manual DCAA Pre-award Accounting System Checklist DoD Contract Proposal Adequacy Checklist DCAA Incurred Cost Adequacy Checklist Incurred Cost Electronically (ICE) Model Links to Acquisition Regulations Small Business Seminar Slides

Contact Information Page | 18 DoD Office of Small Business Programs DCAA