DCAA Accounting System Compliance for Small Business Government Contractors DCAA Accounting System Compliance for Small Business Government Contractors DCAA Accounting System Compliance for Small Business Government Contractors DCAA Accounting System Compliance for Small Business Government Contractors

DCAA Compliance Resources and Guidance

Essential reference materials from DCAA on accounting system compliance for small business federal government contractors

DCAA provides information and guidance for small business government contractors on its website, www.dcaa.mil. There you can find information on accounting system requirements, Incurred Cost Submissions, audit processes, and more to help contractors satisfy the requirements imposed by the Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Regulation Supplement (DFARS). Here are some key resources small business government contractors should be familiar with.

Accounting Compliance Resources

Standard Form 1408 (SF1408): Preaward Survey of Prospective Contractor (Accounting System)  (pdf)

SF1408 is the government form that details the criteria for an adequate accounting system for federal contracting. These criteria are used to evaluate a contractor’s accounting system design prior to the award of a contract that requires an "adequate accounting system" pursuant to FAR 16.301.

Preaward Accounting System Adequacy Checklist  (external link)

DCAA provides this checklist for contractors to document how their accounting system satisfies the criteria on SF1408 ahead of a pre-award accounting system review.

DCAA Manual No. 7641.90 - Information for Contractors  (pdf)

The DCAA publication Information for Contractors provides companies that are new to government contracting a wealth of information on what to expect when doing business with the Federal Government and interacting with DCAA auditors.

DCAA’s Pre-award Survey Checklist (used by the contractor ahead of DCAA’s review) includes the question "Have you read the DCAA publication DCAAM 7641.90 – "Information for Contractors" on DCAA’s website. That should tell you how important it is for new contractors to be familiar with the information contained in this publication.

  • Enclosure 1 provides background information about DCAA.
  • Enclosure 2 provides information on Preaward Surveys of Prospective Contractor Accounting Systems, including what is expected of the accounting system, timekeeping policies and procedures, and penalties for labor mischarging.
  • Enclosure 3 provides information on contractor pricing proposals.
  • Enclosure 4 includes an explanation on the applicability of Cost Accounting Standards (CAS).
  • Enclosure 5 details contract financing and interim and final vouchers
  • Enclosure 6 addresses incurred cost proposal submissions.

DCAA Audit Program: Preaward Survey of Prospective Contractor Accounting System (Activity Code 17740)  (pdf)

This audit program documents the steps a DCAA auditor will take in evaluating the design effectiveness of a contractor’s accounting system for a Preaward Survey.

DCAA Small Business Topic-specific Presentations  (external link)

DCAA publishes a number of presentation slide decks with high level information on important topics for small business government contractors. Topics covered include Accounting System Requirements, Incurred Cost Submissions, Provisional Billing Rates, and Real-time Labor Evaluations, among others.

CAM - Contract Audit Manual  (external link)

The Contract Audit Manual is a DCAA publication that details the auditing policies and procedures for personnel engaged in contract audits. The current version is available on DCAA’s website.

Incurred Cost Submission Adequacy Checklist  (external link)

DCAA’s Checklist for Determining Adequacy of Contractor Incurred Cost Proposal is used to determine if a contractor’s incurred cost submission is complete and accurate. Contractors can use this checklist ahead of submitting their incurred cost proposal to ensure it includes all required schedules and meets the requirements under FAR 52.216-7.

Learn how to comply with on demand training

If you're new to government contract accounting, there is a lot to learn.

ICAT Systems offers an online, on-demand training program, Cost Accounting for Government Contractors, to help you navigate the requirements. This in-depth course addresses the fundamentals of government contract cost accounting and DCAA accounting system compliance, provisional billing rates, and final indirect cost rate proposals (Incurred Cost Proposals).

Using these source materials from DCAA along with sample data, this CPE-eligible course explains:

  • What is required by the relevant FAR and DFARS requirements and audit programs
  • How to satisfy these requirements, illustrated using examples and sample data
  • What to expect from Government auditors in their review of these systems and processes

Participants gain skills to successfully navigate Government oversight of contract cost accounting and billing of contract costs.

Keep Reading

What is Standard Form 1408? 

What government contractors need to know about Standard Form 1408 and the preaward accounting system review.
Read Article »

What is an Incurred Cost Proposal? 

Learn the purpose of an Incurred Cost Proposal, the information required, and steps for submitting this report.
Read Article »