Thursday, October 25, 2012

Preaward Accounting System Survey Checklist

FAR 16.301-3 states that a cost-reimbursement type contract may be used only when the contractor’s accounting system is adequate for determining costs applicable to the contract. Contracting officers must make this determination prior to the award of a contract. If the contracting officer has insufficient information to make this determination, it will request DCAA or another audit organization to perform a Preaward Survey of Prospective Contractor’s Accounting System (SF Form 1408).

DCAA has been instructing contracting officers to send out a preaward survey checklist to prospective contractors to complete prior to requesting a preaward survey of the accounting system. This checklist will help ensure that the contractors understand the requirements of the SF Form 1408 and to ensure that they are ready for DCAA to come in a perform an audit.

This checklist essentially mirrors the requirements of the SF Form 1408 however there are a few additional items that require contractor response. These are:

  • Are you planning on bidding on cost type contracts?
  • Are you ready for a DCAA audit?
  • Have you read the requirements in the SF Form 1408?
  • Have you read the "Information for Contractors" pamphlet?
  • Please identify the DCAA office cognizant of your company.
  • Please identify your company's point of contact.
  • If an outside CPA/Consultant/Non DoD agency has reviewed your Accounting System, please provide a copy of the report.

This last bullet requires some clarification. The "review" that is referred to here is an attestation engagement performed in accordance with Generally Accepted Government Auditing Standards (GAGAS) a.k.a. a "Yellow Book" audit. It would not include the results of, say, an outside firm (like PNWC) performing a review to identify potential weaknesses in a contractor's accounting system and making recommendations, as appropriate, on improving the system to meet Government contracting requirements. Those are not "reviews"  conducted in accordance with GAGAS.

Companies looking to enter the Government contracting arena or existing contractors looking to bid on cost-reimbursable contracts, will find this checklist useful.

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