Blog Tags - Accounting system adequacy

Few topics seem more confusing to contractors than determining accounting system adequacy of subcontractors and consultants prior to awarding an Other Than FFP subcontract in a CPSR environment. Here's a short primer that includes relative accounting system requirements for each type of Other Than FFP subcontract:

Here are some options for documenting accounting system adequacy:

Cost Reimbursable Types (CPFF, CPAF, etc.): Because indirects are "exposed" and costs are not fixed, CR subcontracts require the highest level of accounting adequacy determination: either (a) a DCAA letter; or (b) a letter from a third party auditor who used DCAA's audit plan for the determination.