Small business set-asides represent your competitive advantage in federal contracting—until a size standard violation transforms that advantage into a liability costing you the contract, future set-aside eligibility, and your company’s reputation. Understanding size standards isn’t just about calculating employee counts or revenue thresholds when you submit proposals. It’s about maintaining compliance systems proving you qualify…
DCAA defines adequate internal controls as your ability to ensure costs charged to government contracts are accurate, allocable, and allowable under FAR Part 31 cost principles. Your controller might have 20 years of public accounting experience, but if your system allows unallowable costs to flow into government contract cost pools, you fail the adequacy test….
If your business is pursuing or currently holds government contracts, you’ve likely encountered the term “DCAA compliant accounting systems.” Understanding and implementing these systems isn’t just a regulatory checkbox—it’s essential for maintaining contract eligibility, ensuring accurate billing, and protecting your business from costly audit findings. At Hour Timesheet, we work closely with government contractors every…
A Pennsylvania-based defense contractor faced $16.4 million in questioned costs and automatic adverse audit opinion after missing critical response deadlines during their fiscal year 2024 incurred cost audit. The contractor’s failure to provide requested documentation within the initial 30-day response period established by DCAA audit notification procedures resulted in systematic presumptive cost disallowance affecting overhead…
A Florida-based systems integrator faced $43.8 million in defective pricing adjustments after DCAA auditors discovered the contractor failed to disclose current cost or pricing data during negotiations for contracts exceeding the $2 million Truth-in-Negotiations Act threshold. The audit revealed systematic failures spanning 52 contracts over four years where the contractor possessed vendor quotations, internal cost…
A Massachusetts-based defense contractor faced $22.7 million in questioned costs after DCAA auditors discovered systematic failures to maintain adequate vendor qualification and selection documentation during their fiscal year 2024 incurred cost audit. The contractor’s reliance on informal vendor relationships without documented technical capability assessments, financial responsibility verification, or past performance evaluation violated Federal Acquisition Regulation…
A Virginia-based aerospace contractor faced $18.6 million in questioned costs after DCAA auditors discovered systematic failures to document make-or-buy decisions for subcontracted work exceeding the $2 million threshold during their fiscal year 2024 proposal audit. The contractor’s practice of subcontracting manufacturing operations historically performed in-house without documented economic analysis, capacity utilization assessment, or government notification…
A Texas-based aerospace manufacturer lost $6.8 million in allowable facilities capital cost of money during their fiscal year 2024 contract negotiations after DCAA auditors rejected their net book value calculations for systematic violations of Cost Accounting Standard 414. The contractor’s failure to properly exclude fully depreciated assets, adjust for accumulated depreciation timing, and segregate land…
A mid-Atlantic defense contractor faced $19.8 million in questioned costs after DCAA auditors discovered systematic violations of executive compensation limitations during their 2024 incurred cost audit. The contractor’s failure to properly calculate and segregate executive compensation exceeding the statutory $671,000 ceiling for fiscal year 2025 resulted in automatic unallowable cost penalties, contract modification requirements across…
A California-based engineering contractor faced $11.4 million in questioned costs after DCAA auditors rejected their health insurance allocation methodology during their fiscal year 2024 incurred cost audit. The contractor’s practice of allocating health insurance premiums using headcount rather than labor hours violated Cost Accounting Standard 405 requirements for allocating costs based on causal or beneficial…
