PBMares Accounting Blog

IR&D Cost Allowability Technical Interchange Requirements Changed Via Class Deviation

Posted by Neena Shukla, CPA, CFE, CGMA, FCPA on Dec 1, 2017 8:00:00 AM

We reported in December 2016 that the Department of Defense had issued a final DFARS rule requiring major contractors to engage in technical interchanges with the DOD before such costs are generated.  These interchanges were required to “improve the effectiveness of independent research and development (IR&D) investments by the defense industrial base” that are reimbursed as allowable costs. 

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Topics: Government Contracts

Due Diligence Should Be More than Numbers

Posted by Neena Shukla, CPA, CFE, CGMA, FCPA on Nov 28, 2017 9:47:05 AM

 

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Topics: Government Contracts, Due Diligence

Explaining the Truthful Cost or Pricing Data Act: What Government Contractors Need to Know

Posted by Neena Shukla, CPA, CFE, CGMA, FCPA on Oct 30, 2017 3:08:57 PM

For government contractors, compliance with the Truthful Cost or Pricing Data Act (TINA) is a critical part of staying on the right side of federal contracting and acquisition requirements. But what is the law, and what does it do? Here’s a brief primer.

Let’s start with the obvious: Why is the Truthful Cost or Pricing Data Act called “TINA”?
Because it started out as the Truth in Negotiations Act. TINA was passed in 1962 because government agencies were concerned that they were not getting a fair price from suppliers. However, it wasn’t until the mid-1980s that the government began treating defective pricing as an indication of criminal fraud, especially in single-supplier situations where the government doesn’t always know if it’s paying a fair and reasonable price. In 2013, the government renamed the law, but the old acronym stuck. Understandably, nobody chose to start calling it “TCoPDA.”

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Topics: Government Contracts, TINA

State and Local Tax Compliance: What Government Contractors Need to Know

Posted by Neena Shukla, CPA, CFE, CGMA, FCPA on Sep 19, 2017 2:13:06 PM

The federal government is, by law, exempt from paying state and local taxes. However, this exemption does not apply to organizations with federal or state government contracts, which are designated as agents of the government. In fact, government contractors are subject to specific state and local taxes simply because they are government contractors.

Contractors must be aware of the tax laws specific to the states they operate in, and any localities that impose taxes as well.

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Topics: Government Contracts, SALT

Identifying Unallowable Costs – Executive Compensation

Posted by Neena Shukla, CPA, CFE, CGMA, FCPA on Aug 15, 2017 2:29:15 PM

A large number of small companies and even some considered large have historically not concerned themselves with the allowability of their executive’s compensation.  With annual allowability limits approaching and even exceeding $1,000,000 it was not something that presented an issue in the past.  Executive compensation would never reach that high.  Time to take another look.

The new limit on allowability of annual executive compensation applicable to contracts awarded on and after June 24, 2014 is $487,000 and is applicable to all employees, not just the top five highest paid employees in executive positions.  Employee annual compensation exceeding $487,000 is now a very real potential.

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Topics: Government Contracts

Labor Floor Checks and Labor Interviews – Labor Recording Up Close and Personal

Posted by Neena Shukla, CPA, CFE, CGMA, FCPA on Aug 2, 2017 2:35:23 PM

The costs of labor, especially in service-oriented companies is the most sensitive area of incurred cost that the Defense Contract Audit Agency (DCAA) is required to audit.   Unlike other cost items charged to the Government, labor is not supported by third party documentation such as invoices, purchase orders or receipts. 

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Topics: Government Contracts

"Hi! I’m From DCAA and I’m Here to..."

Posted by Neena Shukla, CPA, CFE, CGMA, FCPA on Jul 25, 2017 9:03:00 AM

If you have proposed on or been awarded a contract with the Federal government, and especially with the Department of Defense, you probably have been the recipient of a visit from the Defense Contract Audit Agency (DCAA).  While these visits to perform a multitude of audits and evaluations are not the end of the world, they should be taken and reacted to seriously.

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Topics: Government Contracts

Subcontracting Primer – Team Work and Due Diligence Pays Off

Posted by Neena Shukla, CPA, CFE, CGMA, FCPA on Jun 21, 2017 3:25:32 PM

 

FAR 44.101 defines a subcontractor as “Any supplier, distributor, vendor, or firm that furnishes supplies or services to, or for, a prime contractor or another subcontractor.”

As a prime contractor or a subcontractor with subcontractors you have certain responsibilities that will help to ensure an efficient and productive relationship that, in the end, provides the desired results (FAR 42.202)e)(2).

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Topics: Government Contracts

Does Your Gov Con Have a Policies and Procedures Road Map?

Posted by Neena Shukla, CPA, CFE, CGMA, FCPA on Jun 6, 2017 10:25:37 AM

To emphasize the need for compliant policies and procedures we need to refer to a quote from the great Yogi Berra, “If you don’t know where you’re going, you might not get there.”  Over the years we have seen organizations doing everything right but without compliant policies and procedures as a road map to ensure consistent compliance, they have failed government audits.  Other organizations that have compliant policies and procedures but have not shared them with the people who need them (i.e. they have them but they are gathering dust on the shelf and are probably obsolete), have also failed, because people did not know what the organization’s goals were or how to respond to compliance situations.

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Topics: Government Contracts

Labor Floor Checks and Labor Interviews – Labor Recording Up Close and Personal

Posted by Neena Shukla, CPA, CFE, CGMA, FCPA on May 4, 2017 9:34:55 AM

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Topics: Government Contracts