Preparing an Incurred Cost Submission Webinar Follow-up: Questions? Aronson Answers

Blog
March 18, 2016

On March 3, 2016, our Aronson LLC Government Contracting specialists Donna Dominguez and Aisha Mian hosted “Cracking the Code: Preparing an Incurred Cost Submission,” where they provided tips, guidance, and best practices to help government contractors efficiently prepare Incurred Cost Submissions.  As a follow up to this webinar, Donna and Aisha have prepared answers to attendee questions that we wanted to share with our blog readers.

Question:  We are working with FFP contracts.  Should I even submit ICS? I have submitted for the last 6 years but never received a letter or audit.

Answer: You only have a requirement to prepare and file an annual Incurred Cost Submission if your contract(s) contain the Allowable Cost and Payment Clause (FAR 52.216-7).  Generally standard FFP contracts do not contain any flexibly priced costs and do not contain FAR 52.216-7; therefore, there is no need to settle any provisional indirect rates

Question:  Are you required to use the ICE model for your ICS regardless if your auditable contracts are with the civilian agencies?   

Answer: You are not required to use the DCAA’s ICE model for your Incurred Cost Submission.  If you are using your own model, you must ensure that you have all the required data per the Allowable Cost and Payment Clause (FAR 52.216-7) listed under FAR 52.216-7(d).  The items listed under this section are included in the DCAA’s adequacy checklist which is what you will want to check your submission against.

If you have contracts with the National Institute of Health (NIH), please note that the format of the submission is different and may be found at the following link: https://oamp.od.nih.gov/dfas/indirect-cost-branch/indirect-cost-submission.

 Question:  We are a small contractor and have never submitted an ICS.  When we review our contracts for FAR 52.216-7, if we find it, should we have submitted an ICS for previous years?  How should we proceed?

Answer: Yes, if you find the clause in any of your contracts, you should submit an Incurred Cost Submission unless any of these contracts have already been closed out under quick closeout FAR 42.708.    Any contracts that contain the Allowable Cost & Payment clause (FAR 52.216-7) and have not been closed out do require that you submit an Incurred Cost Submission (ICS).  You will want to begin with the oldest year and continue to the most recent year for each submission.  This is because Schedule I in the ICS is a cumulative schedule and you will need to have prior year data included in each submission for all contracts that have the Allowable Cost and Payment clause in them.

Question:  Will DCAA disallow copies of receipts? Do they require actual receipts or will they accept copies?

Answer: The DCAA allows copies of receipts so long as they are easily readable copies.  If the copies are not readable, then there is risk of the cost being disallowed.