What Are Cost Accounting Standards
Cost Accounting Standards are all about allocability: a set of standards and rules established by the federal government to help achieve uniformity and consistency in the cost accounting principles within federal contracting. CAS also sets forth regulations that require contractors to disclose their cost accounting practices, to follow the disclosed practices consistently, and to comply with specified standards. It says how you charge to contracts, what gets charged to which contracts, dictates how you maintain your accounting systems, and tells you how the costs have to flow from incursion to the final costs. It also instructs contractors on how to account for certain types of costs.
Understanding Federal Acquisition Regulation Complexities
The Federal Acquisition Regulations consist of 53 sections, with each section dealing with an aspect of the acquisition process. General government acquisition matters and acquisition planning are covered in the first 12 sections, with the remaining 41 sections dealing with labor laws, contract administration and other related topics.
Each governmental agency is allowed to issue its own acquisition supplement to the FAR. This is where we get the DFARS and the GSARS . These documents are only supplements to the FAR, and they do not replace it, they only add to or modify portions of it. When you are dealing with a governmental agency, you must ask them which regulations are applicable to their acquisition process.
You should also keep in mind that some agencies have developed their own set of regulations. The Federal Aviation Agency has the authority from Congress to develop its own regulations, as do some quasi-governmental agencies. The U.S. Postal Service and the Tennessee Valley Authority arent bound by FAR, but they adapted many of the FAR in their own regulations.
Far Compliance: Code Of Business Ethics And Conduct
According to the FAR, all contracts must keep up business practices that have the highest level of honesty and integrity, and it’s mandatory that they have a written code of business conduct and ethics. The FAR suggests an internal control system and training program that’s related to the code of business ethics and conduct that should do the following:
- Be appropriate for the size of the involvement in government contracting and the organization’s size
- Allow disclosure that’s timely for improper conduct to the client
- Make sure that corrective measures are followed and in place when needed.
Government contracts that go over $5,000,000 within 120 days have more defined guidelines on the language that should be used in the contracts. Once that language is in the contract, it’s up to the organization to make sure the terms and conditions are carried out. It’s smart to have an ethics officer to look over the ethics program in the organization and make sure all of these requirements get met on a thorough and consistent basis. Ideally, the ethics officer is someone who’s a senior member of the organization and isn’t directly tied to the contracts administration.
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Certificate Of Compliance With Far Mandatory Disclosure Rule
When it comes to your obligation under contractor ethics and FAR mandatory disclosure rule, contractors and employees must timely disclose via a certificate of compliance with mandatory disclosure, in writing to the agency Office of the Inspector General, with a copy to the Contracting Officer, when, in connection with the award, performance, or closeout of the contract or any subcontract, the contractor has reasonable grounds to believe that a principal, employee, agent, or subcontractor has committed a violation of federal criminal law, involving fraud, conflict of interest, bribery, or gratuity violations, or the False Claims Act. See How to Minimize Criminal Liability in Government Contract Fraud.
- Companies have to show that they are making an internal culture for preventing problems.
- This is something that Suspension and Debarment Officials look for.
- Companies must have a viable process in place for employees.
- Commercial templates may not go to the depth required in government contracting.
Requirements Contractor Code of Business Ethics and Conduct
How Can I Identify A Far Contract
FAR contracts are normally identifiable by their reference to the Federal Acquisition Regulations. Examples of FAR Clauses include: 52.227-11 Patent RightsOwnership by the Contractor, DFAR 252.225-7001 Buy America Act, or HHSAR 352.237-75 Key Personnel.
The cover page will often indicate that it is a contract, and the contract number itself can also be a clue. For Example: If the sponsor is the NIH then the Contract Number will begin with HHSN or N01.
Federal Contracts normally come in two forms: a standard contract form or an Order for Supplies or Services , and the cover page of the contract may also indicate that it is a federal contract.
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Scientific And Technical Reports
R& Dcontractsshallrequirecontractorstofurnishscientificandtechnicalreports, consistentwiththeobjectivesoftheeffortinvolved, asapermanentrecordoftheworkaccomplishedunderthecontract.
AgenciesshouldmakeR& DcontractresultsavailabletootherGovernmentactivitiesandtheprivatesector. Contracting officersshallfollowagencyregulationsregardingsuchmattersasnationalsecurity, protectionofdata, andnew-technologydisseminationpolicy. Reportsshouldbesenttothe-
NationalTechnicalInformationService 5285PortRoyalRoadSpringfield, VA22161.
Whenagenciesrequirethatcompletedreportsbecoveredbyareportdocumentationpage, Standard Form 298, ReportDocumentationPage, thecontractorshouldsubmitacopywiththereport.
Details Of Far Part 52
On the other side of the coin, FAR Part 52 details allowable costs and payments direct labor, direct travel, supplies, services and includes information on invoicing, reimbursement, bill rates, and payments. One of the most important things to note in this section are the list of Reimbursable Costs. These include:
- Indirect Expenses.
Other important billing and payment information in FAR Part 52.216-7 can be found in these sections:
- 52.216-7 Submission of Final Indirect Cost Rate Proposal
- 52.216-7 Indirect Expense Rates for Billing Purposes
- 52.216-7 Audit of Interim Billings
- 52.216-7 Stipulates Requirements for Final Payment.
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The Ultimate Guide To The Federal Acquisition Regulations
Editor’s Note: This post was originally published in March 2020 and has been updated for accuracy and comprehensiveness.
The Federal Acquisition Regulations form government solicitations and contracts. As a result, the sections are mostly written for the government officials who are building the contracts. However, businesses shouldn’t dismiss the FAR either. Not only do they relate to compliance, but also they can give you a serious advantage in government contracting.
Understanding how the government builds contracts can give help you with bidding, marketing, and networking. The clauses and provisions teach you what you can and cannot do. They can also help you speak the language of your future client.
Intellectual Property / Data Rights / Technical Data Rights
|This section is written like a personal reflection, personal essay, or argumentative essay that states a Wikipedia editor’s personal feelings or presents an original argument about a topic. Please help improve it by rewriting it in an encyclopedic style.|
From the Government perspective, the most critical aspect of IP, data, technical data and patent rights revolve around freedom to operate and freedom of contract, namely freedom to have maximum competition. From the perspective of a contractor, the most critical aspect of this area is protection of competitive advantage from disclosure to its competitors. In other words, the contractor/commercial vendor wants to retain its ability to have a product to sell inherent in this desire is a need to prevent the Government from disclosing important technical data, e.g., engineering designs, schematics, specifications, to its competitors when the Government conducts a follow-on acquisition and attempts to seek competition to meet legal and policy mandates in the Competition in Contracting Act and Armed Services Procurement Act.
IP, data rights and technical data rights is a highly specialized practice area in Federal acquisitions. Careful examination of FAR Part 27 and applicable agency FAR supplements must be performed and consultation with a wide variety of Federal statutes accomplished before attempting to deal with IP/data/technical data.
– Required contract clauses and provisions
– Markings provisions
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What Is The Federal Acquisition Regulation
Federal Acquisition Regulation is the rules and regulations that government contractors and their government counterparts must follow to conduct business. Like many other government rules and regulations, FAR is quite a comprehensive overview of the mechanics of government contracting. For those hoping to secure government contracts, in addition to explaining FARwell highlight the key areas to focus on when entering the federal government contracting space.
Contracts For Research With Educational Institutions And Nonprofit Organizations
WhentheR& Dworkisnotdefinedpreciselyandthecontractstatesonlyaperiodduringwhichworkisconducted , researchcontractswitheducationalinstitutionsandnonprofitorganizationsshall-
Thenameoftheprincipalinvestigator , ifthedecisiontocontractisbasedonthatparticularindividualsresearcheffortandmanagementcapabilities and
Requirethatthecontractoradvisethecontractingofficeriftheprincipalinvestigator will, orplansto, devotesubstantiallylessefforttotheworkthananticipated and
Requirethatthecontractorobtainthecontractingofficersapprovaltochangethephenomenonunderstudy, thestatedobjectivesoftheresearch, orthemethodology.
Ifaresearchcontractdoesprovidepreciseobjectivesoraspecificdateforachievementofresults, thecontractingofficermayincludeinthecontracttherequirementssetforthinparagraph ofthissection, ifitisnecessaryfortheGovernmenttoexerciseoversightandapprovalovertheavenuesofapproach, methods, orscheduleofwork.
Abasicagreementshouldbenegotiatedifthenumberofcontractswarrantssuchanagreement . Basicagreementsshouldbereviewedandupdatedatleastannually.
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Should You Conduct An Internal Investigation Before Disclosing
The Mandatory Disclosure Rule allows you look into the evidence, conduct and internal investigation, and to make sure the evidence is credible. The rules do not set a timeline. However, acting promptly would be the standard. You want to have counsel that understands the issues presented and what to look for. An example would be finding evidence that shows that your company was not complying with the limitations on subcontracting rule or that the small business was not complying with SBA procurement size regulations. The company would have an obligation to disclose. However, conducting an internal investigation before complying with the Mandatory Disclosure Rule will be allowed.
If you are unsure about what you need to show under FAR Mandatory Disclosure Rule requirements FAR 52.203-13, need help with internal investigations, or simply need mandatory disclosure consulting, please call a government contract FAR compliance lawyer at 1-866-601-5518 for a free consultation.
What Is The Far
The Federal Acquisition Regulations outline how government solicitation and acquisition of government contract work is to be conducted. FAR is mostly written from the perspective of the government officials who will evaluate small businesses vying for federal contract work and how those officials will put into place those contracts. However, business owners should be aware of FAR as their compliance is dependent on winning contracts. Also, if a business is regularly informed of the FAR rulebook, it will assist in understanding contracts which can lead to winning repeat business. If a business understands and speaks the language of the government, it will see an enhancement in its contract bidding, marketing, and networking. In fact, upon SAM registration, the government will require that businesses understand critical sections of the FAR before allowing them to compete for federal awards.
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Start Winning Federal Contracts Today
Whichever type of contract youre looking for or pursuing, FAMRs experts can help maximize your chances of being awarded funding. We offer various services to certify and your company, from Capability Statement writing to optimizing and streamlining your DSBS profile. On top of that, our portal can alert you to crucial opportunities, reminders, and much more.
Far Mandatory Disclosure Compliance Program And Internal Control Systems
Under FAR 52.203-13, within 90 days, the contractor must also set up an ongoing business ethics awareness and compliance program as well as an internal control system this requirement does not apply if the contractor has represented itself as a small business concern or if the contract is for the acquisition of a commercial item. Pursuant to the internal control system, the system must, at least, provide for:
- Assignment at a sufficiently high level to make sure effectiveness of a compliance program and internal control system
- Reasonable efforts not to include a principal who was engaged in conduct in conflict with the code of business ethics and conduct
- Periodic reviews of company practices and ethics and FAR compliance policies.
- Internal reporting mechanism for improper conduct
- Disciplinary action for improper conduct or failure to prevent
- Timely disclosure of federal criminal law or False Claims Act violations
- Full cooperation with any government agency responsible for audits, investigations, or corrective actions
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Certificate Of Compliance With Mandatory Disclosure When Do You Have To Disclose
The Federal Acquisition Regulation requirements were amplified in 2008 as related to a contractor code of business ethics and conduct, an internal controls system, and mandatory disclosure requirements of certain criminal violations, the False Claims Act , and significant overpayments.
The FAR Mandatory Disclosure Rule, published by the FAR Councils on November 12, 2008, requires that provide a Certificate of Compliance with Mandatory Disclosure at the bidding stage and to the contracting agency potential violations of criminal and civil law and instances of significant overpayment). 73 Fed. Reg. 67064 see 50 GC ¶ 439 .
The MDR also includes included a new section under the Federal Acquisition Regulations that address contractor business ethics and conduct, applicable to certain covered contracts and requiring disclosure of potential wrongful conduct.
The Rule also addressed the new definition of present responsibility. Also, federal contractors and subcontractors, regardless of whether they are subject to the new FAR clause, can be subject to suspension and debarment for failure to timely disclose potential wrongful conduct or significant overpayments.
- The MDR now allows for contractor suspension or debarment of a contractor who knowingly fails to timely disclose violations to the agency in a prompt manner.
- Many small businesses are still not compliant with this important rule.
- Evidence can be found in many of the FCA cases and suspension and debarment cases.
What Is A Federal Contract
A federal contract is a mechanism through which the federal government can fund research and development projects, as well as service and procurement actions. Federal contracts require a high degree of oversight, frequent reporting, specific deliverables, and strict adherence to their terms and conditions, which include clauses from the Federal Acquisition Regulation . This page is mainly aimed at direct FAR contracts issued by the government to the university. However, much of this information is applicable when the university is a subcontractor to another entity that has received a FAR contract.
Federal contracts are considered by the Government to be instruments for procurement of goods and services, with Part 35 of the FAR specifically applying to the purchase of Research and Development. FAR 35.003 provides the following guidance as to when contracts should be used for research and development: Contracts shall be used only when the principal purpose is the acquisition of supplies or services for the direct benefit or use of the Federal Government. Grants or cooperative agreements should be used when the principal purpose of the transaction is to stimulate or support research and development for another public purpose.
Government agencies also have their own clauses that implement and supplement the FAR. These may appear as additional terms and conditions in the FAR contract from a particular agency. Examples include DFARS , HHSAR , and NFS .
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How To Be Compliant With Cas
The purpose of CAS is to promote uniformity and consistency in cost accounting. Congress established the original Cost Accounting Standards Board in 1970, after which 19 cost accounting standards were established. While the standards are still used to this day, the CASB was dissolved in 1980, only to be re-established in 1988 within the confines of the Office of Federal Procurement Policy .
CAS does not apply to all contracts or all contractors. On contracts where a CAS requirement is included, what will be scrutinized includes a full disclosure of your accounting practice, how you are following it, and compliance with standards. Some contractors will be subject to full CAS coverage , while others will be subject to modified CAS coverage . Others may be exempt all together. Both full and modified CAS coverage have defined award thresholds that can trigger a requirement.
An important piece of CAS compliance is the submission of a Disclosure Statement to the Administrative Contracting Officer to document cost accounting practices in writing . This process is time consuming and requires specificity. Contractors should take great care when completing a Disclosure Statement because it will be reviewed by the Defense Contract Audit Agency as a baseline for your business any future changes to a firms accounting practices will require a revision to the Disclosure Statement.
The Disclosure Statement must include:
Understanding The Far And Dfars
Are you beginning to build a business and career around government acquisitions? As Im sure youve noticed, theres a great deal of information youll need to master to successfully bidand wingovernment contracts.
To help you steer through the obstacles that youll encounter as you progress to competing for your first contract, wed like to help you first understand how to use the Federal Acquisition Regulations System or the FAR.
What Is A Government Contractor
Government contractors are businesses or individuals that provide products or services to a government department, agency, or branch. They are referred to as prime contractors and subcontractors.
Moreover, federal contractors are responsible for complying with local, state, and federal laws that govern business operations. The federal government requires demands contractors to comply with labor laws and environmental regulations.
Lack Of Expanded Authorities
Many federal grant policies, including NIH, NSF, and DOE, allow for expanded authorities, which refers to the operating authority provided to grantees under federal grant mechanisms that waive certain prior approval requirements. For instance, many grant policies allow for pre-award spending up to 90 days before the effective date of the contract.
Unlike federal grants, FAR contracts do not allow for expanded authorities. Not only is it ill-advised to spend before the start date of the award, a FAR contract is usually effective on the date of last signature on the contract. Therefore, Project Activations are rarely, if ever, processed to begin work before execution of a FAR contract.
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What Is An Ota Contract
Sometimes, the Department of Defense and the military services need access to research and development projects or prototypes from commercial sources but require more flexibility than the traditional government acquisition process allows.
This is when an OTA becomes a viable and valuable option. This is a special vehicle that specific federal agencies can use to expedite and simplify access to these kinds of mission-critical technologies.
As they are not FAR-based, OTAs do not follow a standard format, nor do they include any of the fine-print terms and conditions that FAR contracts or DoD Grant and Agreement Regulations grants contain. In addition, an OTA isnt a contract, grant, cooperative agreement, or formal solicitation of sources process.
This flexibility makes it easier and more appealing for nontraditional government contractors to work with the federal government.
Although there are fewer guidelines with an OTA, they do contain a few restrictions, including the following: