At a recent Deltek Vision user group meeting, Chad DaGraca, CPA, DiCicco, Gulman & Company, LLC, spoke about understanding Federal Acquisition Regulation (FAR) and AASHTO guidelines.
As many AE firms know, compliance is a necessity not only for most Federal and State government work, but many other client organizations are requiring this level of compliance and cost control. Understanding how to record, monitor, and control costs is vital to competitive bidding and successful profitability on this work.
Mr. DaGraca outlined system requirements to be fully compliant with FAR and AASHTO guidelines. He emphasized that accounting and project costing systems must, identify, segregate and accumulate both direct and indirect costs by general ledger account. Those systems must also identify, segregate and accumulate expressly unallowable costs in accordance with FAR 31. Time and expense reporting were emphasized as areas that need diligent and consistent attention to identify and segregate the allowable and unallowable costs. Special consideration is needed to maintain a labor distribution system that identifies, segregates and accumulates the cost of direct time by project and by a variety of other characteristics, like field labor or other special circumstances. Suggestions he provided to maximize the reimbursed overhead rate underscored the need for a system that managed indirect costs, and both labor and expenses.
Additional best practices he recommended include, maximizing reimbursed overhead rates by separately track Bid & Proposal time from general marketing activities, segregating travel costs from entertainment activities, and setting up accounts and tracking known unallowable costs so you can watch your OH rate during the year.
Having an integrated, proven system to provide these advantages seemed to be the special factor that successful, profitable firms shared. Especially interesting were his suggestions on writing energy efficiency deduction assignment language into your standard government contract [IRC section 179D].
Understanding these guidelines can be complex, and difficult to administer. However, for decades, thousands of Deltek customers have relied on Deltek’s unique expertise in government compliance and efficient, flexible systems to provide the solution for FAR and AASHTO compliance.