Many Government Contractors participate in the Direct Bill Program (DBP). Essentially, the DBP allows contractors to submit billings for cost-reimbursable contracts directly to the finance office, bypassing the provisional approval review steps of various Government agencies. Contractors benefit by quicker payment and reduced paperwork. To qualify for the DBP, contractors must have adequate billing and accounting systems and not be deliquent in submitting their annual incurred cost proposals.
Participation in the DBP is contingent on DCAA's determination that contractors' existing accounting and billing systems are "adequate". New or significantly revised systems that have not been reviewed for adequacy, do not qualify for DBP. As a result, DCAA is telling its auditors to rescind Direct Bill authority for contractors who are implementing significant changes to their systems, until such time as an audit of the new system is completed and a determination of adequacy is made.
Having Direct Bill authority rescinded can have serious consequences for contractors. Cash flows are disrupted and this could increase financing costs. Additionally, the process of manually submitting vouchers for reimbursement will increase administrative effort and cost and reduce efficiencies.
If you are considering upgrades to your accounting and billing systems, you need to also consider the impact that a recension of Direct Bill authority will have on your operations.