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    What is the regulation/requirement on DCAA review of CPFF invoices. Is DCAA required to review each invoice, each month, quarter or just the final invoice? Thanks!


    I went to the DCAA web page and looked at DCAAP 7641.90 Information for Contractors and found when a contractor does not have to submit their vouchers to DCAA and I have included the information below. You also need to make sure you have FAR 52.216-7  Allowable Cost and Payment included in your contract.
    5-301.1 Criteria for Adequate Billing System Internal Controls
    A contractor may be eligible to submit public vouchers directly to the paying office if it meets the following criteria:
    Information for Contractors
    January 2005 5-3


    The contractor's accounting system is acceptable for Government contract costing. The suitability of a new contractor's accounting system for Government contract costing is normally reviewed as part of an overall
    "Preaward Survey" conducted by the contracting officer in accordance with FAR 9.106. For billing purposes, the billed costs must be reconcilable to the cost accounting records.
    The contractor's billing rates are established in accordance with FAR 42.704. FAR 42.704(b) requires the contracting officer or auditor to establish billing rates based on information resulting from recent reviews, previous audits or
    experience, or similar reliable data or experience of other contracting activities.
    The contractor maintains cumulative allowable costs by contract to support the preparation of interim and final vouchers. As shown in Schedule I of the sample incurred cost submission in Chapter 6, contractors must maintain cumulative allowable costs by contract for the preparation of Standard Form 1035, Public Voucher Continuation Sheet. Cumulative costs are necessary to assure that the cumulative amounts billed do not exceed the total estimated
    ceiling costs on the contract and/or the current contract maximum funding levels.
    The contractor timely adjusts billing rates to reflect actual year-end allowable costs. At the end of the fiscal year, the contractor should compare the recorded allowable rates to the billing rates to determine if the billing
    rates should be adjusted. If there is a significant difference between billing and actual rates, billings should be adjusted as soon as possible to reflect either: (1) the additional amount due the contractor (if the billing rates have been lower than actuals), or (2) credit due the Government (if the actual rates have been lower). The adjustment to billings can be submitted on a separate voucher or if appropriate on the next voucher submitted for ongoing contracts.
    Contracts are briefed by the contractor to assure that billings accurately reflect special cost limitations contained in contracts. Each contract brief should contain the specific billing requirements and limitations contained in the contract. (A contract brief is a written summary of the pertinent provisions/terms/requirements, etc. of the contract.)
    Final year-end incurred cost proposals are submitted as required by the Allowable Cost and Payment clause (FAR 52.216-7) contained in cost type contracts. FAR 52.216-7 requires these incurred cost proposals be submitted within six months after the expiration of the contractor's fiscal year. Cost data contained in incurred cost proposals is used to verify the validity of billing rates and the computation of billable indirect costs on interim vouchers. Risk associated with overbilled costs is increased when incurred cost proposals have not been received in a timely manner.
    Final vouchers are submitted in accordance with FAR 52.216-7, Allowable Cost and Payment, contained in cost type contracts. Risk associated with overbilled costs is increased when final vouchers are not received in a timely manner.
    5-301.2 Participation in the Direct Billing Program
    A contractor who has not already been contacted by DCAA, but believes that its policies and procedures meet the criteria outlined above, should write to its cognizant DCAA office to request participation in the direct billing program.
    The letter should include any rationale and/or documentation to support the contractor's belief that its billing system policies and procedures meet the above criteria. During the next scheduled DCAA audit, the DCAA office will review the documentation and make a determination on eligibility to participate in the program.
    If DCAA determines that a contractor is eligible to participate in the direct billing program, the contractor will be authorized to submit interim vouchers directly to the designated Government paying office(s), based on a DCAA authorization memorandum. The DCAA authorization memorandum to the paying office (with a copy to the contractor) will be signed by the cognizant DCAA office manager and state that the contractor has adequate internal controls over its billing system and submits incurred cost proposals and final vouchers per FAR 52.216-7; therefore, provisional DCAA approval of interim vouchers is not needed. A contractor cannot begin submitting vouchers directly until the
    contractor receives this memorandum. When submitting interim vouchers, the paying office requires that one copy of the DCAA authorization memorandum be forwarded with the voucher, and that "Direct Submission Authorized" be included in the voucher signature block.

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