What contractors must know about the Incurred Cost Submission (ICS), including analysis of ICS Model Schedules, Contract Costs, and Rate Structures.
A step-by-step guide to the preparation and filing of the Incurred Cost Submission (ICS) for Government contractors.
Government contractors subject to an “Allowable Cost and Payment” contract clause must submit an adequate incurred cost proposal – together with supporting data for each fiscal year – within six months after the end of those fiscal years. To establish final indirect rates and direct contract costs consistent with these important procurement provisions, contractors must understand all components of an adequate incurred cost proposal and the costs that must be included within these submissions.
This workshop is designed to show contractors how to identify and capture all allowable costs that may be claimed for reimbursement in the prescribed format consistent with FAR Part 42 requirements, and mitigate the risk of audit problems and issues.
The workshop provides a detailed, step by step guide to the preparation and development of the Incurred Cost Submission (ICS). It begins with an explanation of accounting requirements such as the rules for allowability and allocability required to facilitate the successful completion of an ICS. The workshop also analyzes the different types of indirect rate structures used by contractors and delineates how companies should develop and present indirect rate structures and claimed costs as a part of these submissions.
Through the use of a case study and exercise, workshop attendees will prepare and develop a company ICS. Students will learn critical data points, supporting documentation, and how to reduce audit risks when these submissions are reviewed. In addition, the workshop will cover the Incurred Cost Electronic model (ICE), the electronic version of the model incurred cost proposal, and learn how it should be filed.
Whether you have been doing business with the Federal Government for many years or have just won your first contract award, you will be provided with the skills and tools which – if used properly – will help to ensure that your submission is accurate, adequate, and complete.
Workshop Curriculum
- Introduction and Overview: the Incurred Cost
Submission (ICS)
a. Purpose of the ICS
b. When it is Required
c. ICS Schedule Overview
d. Understanding the Requirements of Different
Contract Types
e. Data Requirements for Different Functional Areas - Understanding & Establishing an Indirect Rate Structure
a. Direct & Indirect Costs
b. Indirect Cost Pools & Allocation Bases
c. Causal / Beneficial Relationships
d. Examples / Indirect Cost Pools
- Fringe
- Overhead
- G&A
- Material / Subcontractor Handling.
- Managing Indirect Rates
a. Budgeting / Estimating for Growth
b. Rate Monitoring and Management
c. Modifying Provisional Rates
d. Common Pitfalls to Avoid
e. Changing your Rate Structure
- Cost Allowability and Allocability
a. Understanding Unallowable Costs
b. FAR Part 31
c. Overview of Allocability
d. Reasonable Tests
e. Consistent Treatment of Costs
- ICS Schedule Analysis
a. Schedules H, K & I – the Critical Schedules- Actual Incurred Costs by Contract
- Hours Incurred by Labor Category for T&M Contracts
- Billed Costs vs. Incurred Costs
Cost Pools
c. Schedule E – Establishing the Allocation Bases
d. Schedule F – Facilities Capital Cost of Money
e. Schedule J – Finalizing Subcontractor Cost Data
f. Schedule L – Validating Labor
g. Schedule O – Contract Closeouts
h. Schedule T – Executive Compensation
i. Additional / Supplemental Schedules
- Actual Incurred Costs by Contract
- The ICS Case Study
a. Reviewing Incurred Costs by Contract
b. Data from your Accounting System
c. Additional Job Cost Records
d. Establishing Cost Pools and Bases
e. Excluding Unallowable Costs
f. Setting Up Schedules H&K
g. Schedule I
h. Review of Additional Data Points to Support all
Remaining Schedules
- Preparing & Submitting the ICS
a. Step by Step Guide
b. Schedule Analysis
- Preparing & Submitting the ICE
a. Electronic Version
b. User-Friendly Submission Package
c. An Adequate Submission
- Relevant Historical Data
a. When No Data Exists
b. Contracting Officer Authority
c. Penalties for Mischarging
- ICS Audits
a. Audit Evaluation
b. Contract Costs
c. Direct Costs
d. Indirect Costs
e. Overhead Costs
f. G&A Expenses
g. Facilities Capital Cost of Money
Course Faculty
Chad Braley is a Director with Beason & Nalley, Inc. His areas of expertise include cost accounting and indirect rates, proposal development, contracts management and administration, DCAA audit and non-compliance expertise, ERP implementation support, training, Federal Acquisition Regulations (FAR) and Cost Accounting Standards (CAS) compliance support.
Mr. Braley’s experience also includes providing full contract lifecycle support, from acquisition phase identification and proposal development, to contract closeout assistance. While in industry, Chad managed a wide array of contract types, including cost plus fixed fee (CPFF), cost plus award fee (CPAF), firm fixed price (FFP), and time and material (T&M), both at a prime and subcontract level. In addition to managing these contracts, he was responsible for developing proposals, negotiating contracts, and overseeing the invoicing of all contracts. Mr. Braley also teaches numerous training courses for Federal Publication Seminars, including but not limited to, Government Contract Accounting, Accounting Systems Compliance, Cost & Price Analysis, Understanding Overhead in Government Contracts, Introduction to Government Contracting, and Performance Based Contracting. Mr. Braley has also lectured at NCMA’s World Congress and performs compliance webinars for multiple software companies.
Mr. Braley graduated from the Williams School of Commerce at Washington and Lee University with a Bachelor of Science in Commerce, with a Business Administration major.
Cynthia Dunn is a Senior Managing Consultant for Beason & Nalley, Inc., resident in the company’s Reston, VA office. Beason & Nalley, Inc. focuses on providing expert assistance to both government contractors and government agencies in budgeting, cost accounting, acquisition and proposal support, Federal Acquisition Regulations (FAR) and Cost Accounting Standards (CAS) compliance, program management, and business process reengineering. Prior to joining Beason & Nalley, Inc., Ms. Dunn has been a Division Vice President/Controller for large Government contractors, where she was responsible for managing the accounting (G/L, A/R, A/P, payroll and financial reporting), contracts, human resources and compliance functions (DCAA and Sarbanes-Oxley). Ms. Dunn also spent four years as the manager of Internal Audit for a large government contractor and six years as an auditor in public accounting. Her areas of expertise include financial accounting, internal controls, cost accounting and indirect rates, government compliance (DCAA, FAR and CAS) and internal audit.
Ms. Dunn currently serves her clients by providing full accounting support, contract management, DCAA compliance and audit issues. Beason & Nalley, Inc.’s clients range in size from startup contractors to Fortune 500 Companies. Ms. Dunn has over 20 years experience in the government contracting industry and public accounting/consulting. She has been responsible for the accounting, financial reporting, budgeting and forecasting of a $600 million dollar division. She has negotiated indirect rates and audit issues with DCAA and worked extensively with outside auditors for both annual and Sarbanes-Oxley audits. As a Vice President/Controller, she was responsible for developing and implementing policies and procedures for areas such as accounting, purchasing, travel, timekeeping, relocation, contract administration, human resources, etc. She ensured proper financial and internal controls throughout the division, reengineered business processes and was a key contributor to the strategic planning of the division working closely with the President, CFO and other key management on these issues. As a consultant, Ms. Dunn assists clients with establishing indirect cost rate structures, DCAA issues, incurred cost submissions, developing budgets and forecasts, policies and procedures, Service Contract Act and Davis-Bacon Act issues. She assists in the restructuring of a purchasing system and the policies and procedures to pass a DCMA CPSR. She has also reviewed business processes and assisted management with strategic planning and contract management issues.
Ms. Dunn graduated from Virginia Commonwealth University with a Bachelor of Science in Accounting.