Government Contractors

Prepare your company for compliance challenges that may arise—from cost and pricing for government contracts to contract management and beyond.

Our professionals can help you:

• Review FAR Cost Principles and Pricing. Discover how FAR cost principles and pricing regulations apply to your specific contracts, meet compliance regulations, and impact cost structure through professional analyses.
• Prepare for FAR Submittals. Improve your FAR submittals by increasing documentation accuracy, completeness, and timeliness with support from our professionals.
• Gain Insights on Potential FAR Issues. Avoid common FAR pitfalls that can impact your contracts and successfully navigate complex regulations with insights from our team.
• Access Resource Materials and Tools. Access a variety of resource materials and tools designed to support your team in maintaining FAR compliance, including checklists, guidelines, and best practices.
• Increase Your FAR Knowledge. Expand your knowledge on a wide range of FAR topics, gain practical insights, and real-world applications with our interactive workshops and seminars.

Verify your company's documentation and related indirect rate schedules meet all requirements of FAR Part 42.7 for the specified period. 

Working closely with your leadership, our professionals can help you address focus areas such as calculations and presentation, including:

• Preparation assistance of your indirect cost rate calculations, including provisional rates, actual incurred cost (AIC) rates, indirect cost rates (ICR), and historical incurred cost submission (ICS)
• Analysis of indirect cost pools, including facilities, fringe, material overhead, labor overhead, and general and administrative
• Discussing alternative methods for allocating indirect costs to contracts
• Assistance with your selection of indirect cost rates to meet cost objectives
• Discussing methods to allocate indirect costs to government contracts, subcontracts, task and delivery orders, grants, and more
• Discussing what component costs to include in each cost pool and base or relevant service centers to meet pricing objectives
• Preparing sensitivity analyses to help you select alternative indirect cost rate structure
• Discussing how to establish justification for the selected method of allocating indirect costs
• Assist you in drafting your written policy that describes your method of allocating indirect costs, indirect cost rates, and how indirect cost rates are monitored throughout the year in preparation for auditors
• Assist you in drafting changes to the CAS Disclosure Statement, if needed

Confidently navigate annual ICE model reporting and follow Defense Contract Audit Agency (DCAA) guidelines during each step.

Avoid common challenges related to incurred cost submissions including:

• Data management. Incurred cost submissions require the compilation and management of large amounts of financial and accounting data, which can be difficult and time-consuming, especially for organizations with complex operations.
• Compliance. Organizations must verify incurred cost submissions comply with the regulations and requirements set forth by the government.
• Accuracy. Incurred cost submissions must be accurate and complete, and errors or omissions can result in significant penalties and fines.
• Timeliness. Incurred cost submissions have strict deadlines, and organizations must submit reports on time to avoid penalties and interest charges.
• Auditing. Incurred cost submissions are subject to auditing by the government, which can be time-consuming and require significant resources to complete.
• Communication. Communication with the government during the incurred cost submission process can be challenging as organizations must navigate complex regulations and guidelines.

Review your accounting system setup to help it meet all the necessary requirements of a DCAA compliant accounting system and implement strategic practices and processes so you can focus on running your business.

A DCAA compliant accounting system must demonstrate the following:

• Separate direct costs from indirect costs. Contractors must have a policy defining the characteristics of a direct cost and an indirect cost. The accounting system must have separate accounts for each cost element in significant detail for audit. Direct costs must also be separate from indirect costs in the accounting system.
• Accumulation of direct costs by contract. The accounting system must allocate costs by job, and comparisons need to be made between job cost systems and the general ledger each accounting period.
• Job costing systems. For every direct cost transaction, a job or project number must be assigned and a separate ledger maintained.
• Employee timekeeping. An adequate timekeeping system separates hours by day as well as project.
• Accounts payable systems. All expenses and payables reports must be compared or reconciled each accounting period.
• Unallowable accounting requirements. The accounting system must comply with FAR 31.201-6 that governs how unallowable cost accounts are recorded and reported.
• Compliance with GAAP. All accounting systems should be designed to be accrual-based instead of cash-based in accordance with accounting principles generally accepted in the United States.
• Capture pre-contract costs separately. Costs incurred before the effective date of a contract must be segregated from other contract costs and controlled.
• Maintain indirect cost pools. The system must define indirect cost accounting practices in a consistently followed and easily reported policy.
• Track costs by contract line item. Charge direct costs to line items and allocate indirect costs to contract line items.
• Record and accumulate costs monthly. This is a common practice for most entities, but monthly reporting should include direct and indirect costs.
• Provide reliable historical accounting data. If all other requirements are met, recording and reporting should be reliable and accurate.

Contractors must stay updated with evolving tax laws and regulations to keep your business compliant and to avoid costly penalties.

Stay informed of ever-evolving, complex tax codes and work to reduce your tax liability with insights from our tax professionals who specialize in income tax planning and compliance for contractors.

Enhance your organization's efficiency and profitability as our professionals analyze your indirect cost structure to help identify possible areas for improvement and collaborate with you to create tailored solutions that address your unique requirements. Whether you seek to restructure your cost accounting system or improve your budgeting and forecasting capabilities, we can assist.

Our professionals can help:

• Review pools of indirect costs, including facilities, fringe, material overhead, labor overhead, and general and administrative
• Propose possible alternative methods for allocating indirect costs to contracts
• Assist with your selection of indirect cost rates to meet your cost objectives
• Discuss various methods for allocating these indirect costs to government contracts, subcontracts, task and delivery orders, grants, and more
• Provide recommendations for component costs to include in each cost pool and base or relevant service centers to meet pricing objectives
• Conduct sensitivity analyses to help management select alternative indirect cost rate structure

Government contractors may encounter difficulties dealing with Cost Accounting Standards (CAS). These standards may apply to prime contractors and subcontractors or specific contracts to estimate, record, and report expenses, as well as settle disputes related to procurements with the federal government, unless exempted.

The CAS offer flexibility in selecting from a range of compliant cost accounting practices, but navigating these options requires deep experience in government contract cost accounting, pricing regulations, and compliance requirements. Our professionals can help you strategically assess your options.

A cost accounting practice refers to an accounting method or technique disclosed or established for measuring costs, assigning costs to accounting periods, or allocating costs to cost objectives. The Cost Accounting Standards Board (CASB) is responsible for ensuring consistency and uniformity in contractor cost accounting practices, as well as proper allocation of costs for government grants and contracts, by issuing standards.

The CASB has promulgated 19 standards that outline the purpose, definitions, fundamental requirements, techniques for application, and illustrations of each standard. Some standards also specify the interpretation, exemption, and effective date, as applicable.

Prepare or revisit your CASB Disclosure Statements Form CASB DS‐1 and avoid common mistakes that can arise while preparing an adequate Disclosure Statement (DS). Our professionals can carefully review your existing DS and cost accounting practices to help you clearly identify and distinguish CAS accounting practices from financial reporting accounting practices.

Properly prepare your CASB disclosure statements by avoiding the following:

• Incomplete disclosure. Failure to fully disclose the nature and extent of cost accounting practices used in your organization's operations.
• Inaccurate or inconsistent data. Providing incorrect or inconsistent information about cost accounting practices used or cost allocation methodologies employed.
• Improper interpretation of standards. Misinterpreting standards or failing to apply them appropriately can result in inconsistencies in disclosure.
• Failure to update disclosure statements. Updates not made regularly won’t reflect changes in your organization's operations and cost accounting practices.
• Noncompliance with disclosure requirements. Failure to comply with disclosure requirements outlined by the CASB, such as failing to provide information on cost accounting practices in use, allocation methods employed, or details on how unallowable costs are handled.
• Lack of documentation. Failing to provide sufficient documentation to support the disclosures made in the disclosure statement.
• Failure to incorporate all relevant subsidiaries and affiliates. Neglecting to include all relevant subsidiaries and affiliates in the disclosure statement can result in inconsistencies in cost accounting practices across the organization.

Government contracts can be vastly different from those in the commercial business sector, and disputes with the government can create significant challenges and consequences.

Government contracts typically involve unique, cumbersome, and onerous terms and conditions, making them ripe for potential disputes. These terms often give rise to unique areas of contention, such as complex accounting rules, contract terminations, bid protests, unilateral contract changes, and False Claims Act actions.

Develop proposals that focus on key information and include a clear, concise presentation by collaborating with our team of professionals. Our professionals support you throughout the proposal development process, offering valuable insights and guidance that can enhance the quality and effectiveness of your final product.

Our services in this area include:

• Pricing Models. Empower your management team to create tailored pricing models that are specific to your needs, accurate and adhere to government contracts standards with support from our professionals who excel at developing forward pricing and preparing government pricing worksheets.
• Cost Volume Development. Prepare detailed cost volume narratives that address government RFPs requirements, including narratives clearly communicating cost structure and that facilitate compliance and competitiveness with input from professionals with an in-depth understanding of cost volume requirements.
• Commercial Item Determination. Efficiently consolidate and align required information to FAR definitions, including analyzing similar products and services, non-government sales data, market research, and pricing, with support from our team. We also review your proposal to help you meet government regulations and standards pertaining to commercial items.
• Subcontract Cost and Price Analysis. Enhance your proposal’s integrity with a thorough analysis of proposed subcontractors' costs and prices, including assessing whether these amounts are fair and justified, with support from our compliance professionals.

Keeping track of pricing policies and practices can be a daunting task, especially when you're focused on meeting the contract’s demands. Conducting a thorough review of your pricing practices during the preceding 12 months, however, can help you prepare.

By carefully analyzing your pricing data, we can help you identify changes in your discounting policies or practices that may need to be disclosed in your Commercial Sales Practice Format (CSP‐1).

Efficient administration of time and material (T&M), labor hours, firm fixed price (FFP), or level of effort (LOE) contracts requires an accurate mapping of labor categories.

While job descriptions and an internal mapping system are a good starting point, there are other factors to consider. Our professionals can assist you in building an internal matrix of labor categories that align with contract requirements and focus on areas that often go overlooked.

For example, the relationship between pay scales and labor categories must be analyzed to avoid skewing mapping. Highly paid employees with no formal degree or certification requirements can also complicate mapping and hinder a contractor's ability to invoice customers at a rate that covers costs.

Receive a competitive analysis of labor rates and pricing analyses in addition to standard labor rate analysis.

Using open source and Freedom of Information Act (FOIA) data, our professionals thoroughly research your company's labor rates as well as those of your competitors.

Identify your requirements and determine necessary features for an effective contract management system.

Our professionals will provide findings from our research to help you evaluate and select software solutions for your needs and develop a comprehensive implementation plan that includes necessary timelines, budget, and resources.

We will provide training to your team, focused on the necessary skills to effectively utilize your contract management system. Additionally, we will assist you in establishing a smooth workflow with clear procedures for entering and accessing contract data.

As a GSA Schedule contractor, it's essential to review your historical pricing practices to verify your pricing disclosures are up‐to‐date and accurate. If you need to make changes to the terms and conditions of your contract, it's crucial to do so outside the option exercise modification itself.

To stay ahead, contractors should review their schedules at least 12 months before option expiration and try to make any bilateral contract modifications before receiving their notification letter. This can help you avoid last-minute surprises and provide you ample time to make any necessary adjustments to your contract.

Reviewing GSA schedule option extension packages requires attention to detail and knowledge of the GSA schedule program requirements.

Steps we can help you take in reviewing your GSA schedule option extension packages include analyzing:

• Eligibility. Is contractor eligible to renew GSA schedule contract by reviewing performance and compliance history?
• Extension package. Is the option extension package complete, accurate, and meeting all requirements?
• Pricing. Is proposed pricing compliant with GSA schedule pricing policies, including the Price Reductions Clause and Industrial Funding Fee (IFF) requirements?
• Scope of work. Is the scope of work in extension package consistent with original GSA schedule contract, and has GSA approved any changes?
• Documentation. Is the required documentation included in the extension package, such as the contractor's representation and certifications, contract modifications, and updated product and service descriptions?
• Compliance. Is contractor compliant with applicable laws and regulations, including those related to labor standards, environmental requirements, and cybersecurity?
• Submission. Is the extension package submitted to the GSA within required timeframe and have required fees been paid?

It’s crucial government contractors have accurate financial statements that provide a clear picture of your company's financial health and support compliance with government regulations and requirements.

Add credibility to the accuracy of your financial data with our professionals providing high-quality financial statement audits.

Making critical financial decisions requires confidence in the information you access. We help you solve complex business challenges with quality financial and nonfinancial data so you can make more informed financial decisions and confidently steer your company towards the future.

It’s crucial government contractors have accurate financial statements as these statements provide a clear picture of your company's financial health and support compliance with government regulations and requirements.

• Financial statement reviews. The objective of a review engagement is to obtain limited assurance as a basis for reporting whether we’re aware of any material modifications that should be made to the financial statements for them to be in accordance with the applicable financial reporting framework, primarily through the performance of inquiry and analytical procedures.
• Financial statement compilations. The objective of a compilation engagement is to apply accounting and financial reporting knowledge to assist management in the presentation of financial statements and report without undertaking to obtain or provide any assurance that there are no material modifications that should be made to the financial statements for them to be in accordance with the applicable financial reporting framework.

Seamlessly navigate your contract audit and gain a comprehensive understanding of the standards against which your compliance will be evaluated. Our professionals can help you identify areas of potential risk, effectively manage the audit process, address and resolve audit issues, and provide support during government audits and regulatory inquiries.

By collaborating with our professionals, you can maintain contract compliance, mitigate risk, with the goal of achieving a smoother experience throughout government audits and investigations.

Leverage specialized consulting services that support government contractors through various types of audits. Our experienced team can help management with compliance, accuracy, and efficiency in navigating government regulations. 

We support the following types of government contract audits:

• Incurred Cost Audits (DCAA). Successfully demonstrate that costs claimed under a contract are allowable, allocable, and reasonable according to contract terms and applicable with support from our professionals.
• Pre-Award Audits (DCAA). Exhibit contractors’ financial capability and accounting system adequacy to government agencies before a contract is awarded with guidance from our professionals.
• Post-Award Audits (DCAA). Successfully comply with contract terms post-award, including pricing qualifications and adhering to the Truth in Negotiations Act (TINA), with input from our professionals.
• Financial Capability Audits (DCAA, SBA). Document contractors’ financial health and stability and ascertain that they have the resources to fulfill contract requirements with professional support and guidance.
• Contractor Purchasing System Reviews (CPSR) (DCMA). Exhibit the efficiency and effectiveness of the contractor purchasing system, demonstrating it complies with government requirements, with insights and guidance from our team.
• Contractor Estimating System Audits (DCAA). Tap into professional experience that can help contractors in demonstrating that policies, procedures, and practices for estimating costs in proposals submitted to the government are adequate.
• Cost Accounting Standards (CAS) Audits (DCAA). Leverage professional support that can help validate contractor compliance with Cost Accounting Standards to achieve uniformity and consistency in cost accounting practices.
• Forward Pricing Rate Audits (DCAA). Confirm the reasonableness of proposed forward pricing rates that are used to estimate indirect costs for future contracts are accurate and complete with professional support.
• Compliance Audits (Various Agencies). Demonstrate adherence to specific regulatory requirements and contract terms, including ethical standards and procurement integrity, in a timely manner with help from our team.
• Contract Closeout Audits (DCAA, DCMA). Show the government that all contract terms have been met, all costs have been correctly billed and paid, and that the contract can be officially closed quickly and efficiently with professional support.

Meet federal and state compliance regulations dictating annual audits of indirect cost rates, performed by experienced audit professionals with specialized industry knowledge by collaborating with our team.

Facilitate a smooth audit process while also receiving insights that can lead to improved processes and increased productivity by leveraging our deep experience working with government contractors and our expansive knowledge of Government Auditing Standards and the FAR 31 cost principles.

We can also help you evaluate your internal control structure for design and functionality. This evaluation includes:

• Testing direct, indirect, and overhead costs to verify compliance with FAR 31 and don’t include unallowable costs.
• Verifying reporting packages are complete and include an Independent Auditor’s Report on the indirect cost rate schedule, a list of allowable account adjustments with FAR references, required note disclosures to the indirect rate schedule, and an Independent Auditor’s Report on internal control in accordance with Government Auditing Standards.

As a government contractor, it's crucial to have a clear understanding of your business performance and to plan strategically for the future.

Analyze your financial data and identify trends, opportunities, and potential risks so you can stay ahead of change. We can also assist you in developing a comprehensive business plan that aligns with your goals and objectives as a government contractor.

M&A are complex transactions that require specialized knowledge of the unique challenges and regulations that come with these events.

Our professionals can help you navigate the complexities of the transaction process and help you protect your interests throughout the transaction.

Government contractors are subject to strict regulations and standards, which require them to maintain compliant and effective business systems. Develop, implement, and maintain systems with technology products that meet government standards with guidance from our professionals.

We help contractors evaluate whether their accounting, purchasing, estimating, and other systems are compliant with government regulations and that necessary internal controls are in place.

We can provide assistance for popular systems including Alteryx, DOMO, Microsoft Power BI, NetSuite, Snowflake, QuickBooks, Tableau, UiPath, and Workday.

Turn your raw data into actionable insights that can be used to identify new business opportunities, enhance operations, and improve overall performance.

Leveraging state-of-the-art tools and techniques to analyze large and complex datasets, we can deliver customized reports and visualizations that provide real-time visibility into your key business metrics.

Systems assessments are an essential tool for government contractors looking to make operations run smoothly and in compliance with regulations.

Evaluate your current systems against industry standards to identify areas of weakness and opportunities for improvement.

Identify and implement the appropriate software solutions to meet your unique needs.

Assessing your business processes and goals, our professionals help evaluate your current software systems to identify areas for improvement and implement software applications to help enhance your operations, streamline workflows, and improve overall efficiency.

Streamline your accounting and financial management processes as our professionals help you to implement a customized solution that integrates multiple aspects of your business operations.

The DCAA On-Demand Module can often be used to help you enhance compliance with government regulations and standards by building in many of the DCAA accounting system standards into the software.

Meet the required level of the Cybersecurity Maturity Model Certification (CMMC)—a unified standard for implementing cybersecurity measures across the Defense Industrial Base (DIB) sector—to remain eligible for Department of Defense contracts.

Maintaining accounting systems that meet the requirements of the Defense Contract Audit Agency (DCAA) is crucial to maintain eligibility for contracts and avoid penalties for noncompliance.

Assess your current accounting system and identify any areas that need improvement to meet DCAA compliance standards. We will then work with you to assist you in implementing necessary changes, which may include setting up or revising a chart of accounts, establishing and documenting proper policies and procedures, and analyzing financial transactions to assess whether they are accurately tracked and recorded.

Outsourced or co-sourced internal audits can provide valuable insights and help support compliance with government regulations.

By outsourcing or co-sourcing your internal audit function, you can reduce the burden on your staff and free up resources to focus on your core business activities. Our professionals can help assess the effectiveness of your internal controls, identify areas of potential risk, and recommend strategies to mitigate those risks.

Demonstrate your commitment to security and reliability, enhance your reputation, and build stronger relationships with your clients by conducting System and Organization Controls (SOC) examinations.

SOC 1®, SOC 2®, and SOC 3® examinations are designed to meet the specific needs of your organization and the requirements of your clients. Independent reporting by a CPA on the integrity of your business’s internal control environment can be key to attracting, serving, and retaining your customers.

Assess the effectiveness of your internal controls and safeguards with a SOC examination and receive independent, actionable feedback based on the reported results.

SOC examinations can help provide a level of assurance that your systems meet the described criteria relevant to internal control over financial reporting through SOC 1® or data security, availability, processing integrity, confidentiality, or privacy through SOC 2®. Information about the design and operational effectiveness of your controls may then be used by your customers in connection with their IT security assessments or by your customers’ financial statement auditors to reduce their audit procedures.

For government contractors that need to comply with the Federal Risk and Authorization Management Program (FedRAMP), the process can be complex and time-consuming.

Our FedRAMP advisory engagements begin with a thorough evaluation of your organization's cloud services, identifying potential gaps, risks, and vulnerabilities. From there, we provide guidance on remediation efforts and help you document and implement the necessary controls to help achieve compliance with FedRAMP requirements.

Identification and remediation of potential security vulnerabilities in your payment card processing systems is critical to comply with Payment Card Industry Data Security Standards (PCI DSS), intended to protect cardholder data.

If your organization stores, processes, or transmits cardholder data, or otherwise could impact the security of cardholder data, we can assist you with your PCI DSS self-assessment questionnaire or conduct a third-party assessment. Additionally, we can assist you with vulnerability scans or penetration tests, as required.

Sound policies, well-designed procedures, and robust internal controls are the backbone of any successful government contractor.

Contractors should evaluate, design, and implement policies, procedures, and internal controls that meet regulatory requirements and drive business success.

Our solutions cover many aspects of your financial and compliance needs, including billing systems, labor accounting, indirect cost accounting, other direct costs, control environment, compensation systems, purchasing systems, estimating systems, property systems, material management, and accounting systems.

We work closely with you to understand and document your business processes from transaction inception through conclusion—and identify and analyze potential compliance risks related to those processes and assess the balance of automated versus manual, preventive versus detective internal control activities.

We'll help you identify internal control design gaps and provide recommendations for new or improved controls to remediate those gaps.