As is true in nearly every aspect of government contract cost accounting, few things are crystal clear. While a few areas of cost allowability are straight forward, others can be the subject of intense debate between contractors and auditors – especially where fines and penalties, CAS 405 noncompliances, and accounting system deficiencies are at stake. To minimize costly audit findings and disputes, we analyze the facts and circumstances to establish artful policy statements, accounting practices, and supporting documentation for costs where allowability could be debatable.
Our professionals offer a diverse background of perspectives from both industry and government, with relevant experiences including drafting unallowable cost policies, performing audit tests for unallowable costs in connection with incurred cost proposals, developing and providing training, assisting clients with routine audit inquiries and rebuttals of unallowable cost allegations, and helping clients prevail in complex negotiations and litigation regarding cost allowability matters.
Baker Tilly’s government contracting professionals approach each client’s circumstances with a fresh and unique perspective, and apply the cost principles from a variety of government regulations, including FAR Part 31, OMB Uniform Administrative Guidance, and agency FAR supplements in practical, defensible ways. The letter and spirit of each cost principle cannot be interpreted in a vacuum; our approach helps clients to develop policy statements and procedural guidelines that make sense in the context of the company’s culture, values, operating environment, customer/contract mix, employee regulatory awareness, level of management’s risk tolerance, and the government’s current and historical oversight emphasis.
Our goal is to develop an appropriate balance between a contractor’s established business practices and the letter-of-the-law, while avoiding, or at a minimum mitigating, the risk of controversy or disputes.