The deadline
Under FAR 52.216-7, contractors generally submit final indirect rate proposals within six months after the end of each fiscal year. Extensions require contracting officer approval, and late or inadequate submissions can delay payment of fee and withheld amounts.
Before you build the schedules
- Close the books and reconcile the general ledger to audited or reviewed financial statements.
- Confirm that unallowable costs under FAR 31.205 (entertainment, certain lobbying, bad debts, fines, excess executive compensation and others) are identified and excluded from claimed pools.
- Tie labor in the timekeeping system to the job-cost ledger by employee and contract.
- Document how each indirect pool and allocation base is defined, and note any changes from the prior year.
- Reconcile billings to the provisional rates against actual costs so you can see any over- or under-billing.
Building the submission
Most contractors use DCAA's Incurred Cost Electronically (ICE) model, which organizes pools, bases, contract costs and reconciliations into standard schedules. An adequate submission makes the audit faster and reduces follow-up requests.
After you submit
Respond promptly to DCAA's adequacy review, keep support organized by schedule, and track rate variances during the current year so next year's provisional billing rates are closer to actual.
Our government contracting team prepares incurred cost submissions, catches up overdue years and supports contractors through DCAA audits.
This article is general information, not advice for your situation. Contact us to discuss your facts.
Related service: Government Contracting Compliance
