For any government contract to be furthered to any contractor, it is important that he passes through DCAA (Defense Contract audit Agency). And the contractors who are willing to gain the released contract are required to submit their correct costs incurred for a particular accounting time period for reviews and audit. And the process through which this is channelized is known as incurred cost submissions. These submission are done in order to view if the costs submitted by the contractors lie under the standards of government contract or not, and if or not they are allowable and reasonable at the same time. So, it is important for a business to understand the correct incurred cost submission’s requirements to make the business compliant and good to face any audit.
And it is on the basis of this that DCAA conducts the compliance audit to know if the information provided is within the FAR (Federal Acquisition Regulation). It is essential for the government contractors to meet the entire requirements to escape any penalties, cost disallowance, and other unwanted consequences. The incurred cost submissions are generally done within the span of six months once the contractors’ accounting period ends. These submissions demand the information on labor costs, overhead costs, material costs, and administrative and general expenses. So, these all are reviewed in order to see if the cost is important from contract’s performance point of view and reasonable enough to sustain it.
For this, one needs to present a number of documents supporting the process. This can involve the details on payrolls, invoices raised, and other financial records, along with having a consistent record-keeping. For further information and directional help, you can visit DCCA Consulting.
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