The U.S. government is the largest company in the world with 11 million federal contracts signed per year. 95% of those federal contracts are awarded to small and medium sized business vendors and approximately $1 billion in new opportunities in the services sector of government contracting is available to bid on every day.
There are four contract types: cost plus, time and materials, indefinite quantity/indefinite delivery, and fixed price.
Part of the US government is the DCCA, or Defense Contract Audit Agency. The DCAA is the largest audit agency within the government and they are tasked with auditing federal contracts. It is an agency of the Department of Defense under the direction of the Under Secretary of Defense (Comptroller). The DCAA reviews the accounting practices and accounting of government contractors, including prime contractors and subcontractors. It is a global organization with offices throughout the US, Asia, Pacific, and Europe. It began to provide audit and financial advisory services to Government contracting officials in July 1, 1965.
The most common DCAA audits are: accounting system reviews, cost proposals, incurred costs, and labor floor checks. The top 7 elements required in an accounting system are: identify and accumulate direct costs by contract; allocate indirect costs to intermediate and final cost objectives; accumulate costs under general ledger control; an integrated time-card collection system; exclude unallowable costs from contracts; identify costs by contract line item; and a proper segregation of direct and indirect costs.
Popular accounting software includes: Deltek, Jamis, QuickBooks, Procas, Microsoft Dynamics, Unanat, and more.
For more information, visit KDuncan & Company kduncan.com, a licensed and certified Public Accounting and Financial Services firm that provides support to agencies of the federal government and government contractors. KDuncan is headquartered in Silver Spring, MD but provides support nationwide and is a member of the Association of Government Accountants.