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Incurred Cost Proposals


Govcon Accountants helps government contractors to submit their annual incurred cost proposal.
 
Federal contractors with cost-reimbursable type contracts must submit an incurred cost proposal with supporting data within six months after the end of their fiscal year. For most contractors, with a fiscal year ending on December 31, this means a deadline of June 30.

DCAA has developed an electronic version of the Model Incurred Cost Proposal (“ICE Model”).
 
Govcon Accountants can train your staff on how to complete the ICE Model from your Quickbooks data.  Or, we can complete the submission for you.
 
The incurred cost proposal can result in you owing a refund to the government, or the government may owe you additional funds.  It’s a reconciliation of what you billed the government on a provisional basis, using estimated or fixed rates, and what should have actually been billed, after all costs have been settled for the year.
 
Failure to submit the incurred cost proposal when it is due can result in negative actions by DCAA.  In fact, if the incurred cost proposal is more than six months overdue, your contracting officer may receive a unilateral recommendation on your final rates and total contact costs without your input.  Generally, the rates recommended by DCAA do not favor the contractor.

How to Prepare

Once submitted, the incurred cost proposal will be audited by DCAA.  To prepare for the subsequent audit, ensure that you complete the following steps:

  1. Ensure that contracts are set up correctly in the accounting system
  2. Reconcile all schedules to your accounting system
  3. Submitted costs should tie out to your general ledger
  4. Ensure that contracts are set up correctly in the accounting system
  5. Identify and account for unallowable costs
  6. Update your written accounting policies and procedures

ICE Model

The ICE Model is essentially a macro spreadsheet with multiple tabs for each schedule of the ICS. The tabs are linked to each other to compute the final fringe and overhead/G&A rates for the company.  The final rates are applied to contract costs, and an amount over or underbilled is computed.

The Schedules

Schedule A – Summary of Claimed Indirect Expense Rates
Schedule B – General & Administrative Expenses
Schedule C – Final Indirect Cost Pool
Schedule D – Intermediate Indirect Cost Pool
Fringe – Fringe Expense
Schedule E – Claimed Allocation Bases
Schedule F – Facilities Capital Cost of Money Factors Computation
Schedule F-1 – Calculate Average Net Book Value
Schedule G – Reconciliation of Books of Account and Claimed Direct Costs
Schedule G-1 – Reconciliation of General Ledger and Job Costs
Schedule H Summary – Summary Schedule H of Direct Contract/Subcontract Costs
Schedule H – Schedule of Direct Costs by Contract/Subcontract and Indirect Expense Applied at Claimed Rates
Schedule H-1 – Government Participation in Indirect Expense Pools
Schedule I – Schedule of Cumulative Direct and Indirect Costs Claimed and Billed
Schedule J – Subcontract Information
Schedule K – Summary of Hours and Amounts on T&M/Labor Hour Contracts
Schedule L – Reconciliation of Total Payroll to Total Labor Distribution
Schedule M – Listing of Decisions/Agreements/Approvals and Description of Accounting/Organizational Changes
Schedule N – Certificate of Final Indirect Costs
Schedule O – Contract Closing Information for Contracts Completed in this Fiscal Year
Schedule P – Incurred Cost Proposals Prior
Schedule R – Federal and State Income Tax Return Reconciliation
Schedule S – ACO’s and PCO’s for Cost Contracts
Supplemental A (1-4) – Comparative Analysis of Indirect Cost Pools and Direct Costs.
Supplemental B – General Organizational Information and Executive Compensation.
Supplemental C – Prime Contracts With Performance as Subcontractor
Supplemental O – Briefing Contracts

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