4 Facts Government Contractors New to the Federal Market Need to Know

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Firms new to the federal market or at least new to larger cost reimbursement contracts (not fixed fee), may not fully understand government compliance. The following are four facts government contractors need to know to win government contracts and remain compliant to DCAA and other government requirements.
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(1) A Pre-Award Accounting System Survey is Typical Before a Contract is Awarded - A prospective contractor’s accounting system and internal controls must provide reasonable assurance that their system and cost data are reliable, that misallocations and mischarges are minimized, and that contract charges are consistent with invoice procedures. The government recommends contractors have a reliable system in place before bidding on contracts - To see an example of the survey you must pass before you get an award, go to: Pre-Award Survey of Prospective Contractor Accounting System.
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(2) Small Businesses are Not Exempt from Accounting for Costs on Cost Plus Contracts - Small businesses with contracts less than $7.5 million are exempt from the 19 Cost Accounting Standards (CAS). With contracts between $7.5 million and $50 million, they are exempt from all but four of the CAS standards. But, they are not exempt from accounting for their costs on any Cost Plus contract.
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(3) A Financial Accounting System is Not the Same as a Cost Accounting System - Whereas financial accounting will report total costs at a company-wide level, cost accounting allocates those costs among various contracts, jobs, and cost objectives.
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(4) Proposals for Government Contracts Often Contain Two Errors Regarding Accounting Systems - Not addressing these items having to do with your accounting system and software could jeopardize your proposal.
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(a) The prospective contractor cannot ensure an adequate support system for indirect expenses on contracts.
(b) The prospective contractor has an inadequate or poor accounting and estimating system.
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This is why it is so critical to ensure your accounting software is up to the task of fulfilling a variety of contract requirements before you bid or win contracts or enlarge your federal-market practice. Synergy Business Solutions thrives on helping prospective or existing contractors be more successful (either those new to the market or those with little experience with cost reimbursement contracts). Moreover, we are happy to demonstrate the capabilities of Microsoft Dynamics SL, Microsoft's flagship solution for government compliance, to meet government requirements in your unique sector.

1 thought on “4 Facts Government Contractors New to the Federal Market Need to Know”

  1. Nice post, thanks for sharing.the government has used the federal acquisition process as a tool to. small business concerns and that award will be made at fair market prices.

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