Blog Tags - Accounting system

I get a lot of questions from contractors preparing for DCMA review regarding determining accounting system adequacy "to CPSR standards" for Other-Than-FFP awards to individuals and small businesses that have not gone through DCAA audit. It can be a difficult issue to administer especially on quick turnaround efforts which include subcontractors who lack demonstrable corporate-level sophistication with financial aspects of government contracting.

I suggest that there are two main things to keep in mind when determining accounting system adequacy:

Here's a good example of the difference between FAR requirements and the requirements for purchasing system approval. When you read FAR Part 16 you'll notice that determination of accounting system adequacy (accomplished by the Government via DCAA accounting system audit and/or contractor completion of SF1408) is only required prior to award of a cost reimbursable contract. However, DCMA wants to see a determination of accounting system adequacy prior to award of ANY "flexibly priced" subcontract, including T&M & Labor Hour subcontracts.