Evaluation Of Defense Contract Audit Agency Sampling Initiative Of Incurred Cost Proposals On Low Risk Contractors

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ISBN 13 :
Total Pages : 69 pages
Book Rating : 4.:/5 (946 download)

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Download or read book Defense Contract Audit Agency Audits of Indirect Costs at Major Contractors written by and published by . This book was released on 1998 with total page 69 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Federal Acquisition Regulation requires a contractor to submit to the contracting officer a final indirect cost rate proposal reflecting actual cost history for the year. The Defense Contract Audit Agency is required to audit the contractor's incurred cost submission and to issue an advisory report. In addition, Title 10, United States Code, Section 2324, "Allowable Costs Under Defense Contracts"; Title 41, United States Code, Section 256, "Allowability of Costs"; and Cost Accounting Standard 405, "Accounting for Unallowable Costs," require the contractor to properly identity and segregate expressly unallowable costs. Both Federal statutes permit the contracting officer to assess a penalty when the contractor includes expressly unallowable costs or other costs previously determined to be unallowable in the incurred cost submission. (see Appendix C). Therefore, an important purpose of the audit is to identify and report claimed costs that the auditor believes are unallowable under the Federal Acquisition Regulation, advance agreements, and specific contract clauses or are unallowable subject to penalties. In FY 1996, the Defense Contract Audit Agency spent about 1.5 million hours (about 1,000 staff years) auditing about $66 billion in direct and indirect incurred costs at major contractors. A major contractor is one with $70 million or more in annual reimbursable contract costs.