Tuesday, May 17, 2016

Due Date for Annual Incurred Cost Submissions Rapidly Approaching

Here's our annual incurred cost submission due date reminder.

If you are a calendar year contractor (i.e. your accounting year ends on December 31st), and have a cost-type contract, your annual incurred cost submission is due on June 30th.

If you are not sure as to whether an incurred cost submission is required, check your contract for the contract clause at FAR 52.216-7, Allowable Cost and Payment. If this clause is in your contract, you are most likely required to prepare the annual submission. We say "most likely" because ever so often, the Government includes contract clauses that are not applicable to the contract in question. If still in doubt, contact your contracting officer.

DCAA (Defense Contract Audit Agency) has a few resources to help contractors prepare and submit these annual rituals. These include:

The contracting officer has the authority to establish unilateral indirect rates for contractors who do not submit rates in a timely manner. These unilateral rates are usually set at a level where the Government believes its interests will be protected. That typically means at a level far below the provisional billing rates for that year. Unilateral rates, when invoked, often create cash-flow issues for contractors.

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