McNew & Associates, Inc. Blog

Incurred Cost Submission

An Incurred Cost Submission is a proposal containing your actual incurred costs for the most recently completed contractor fiscal year.  The proposal contains actual costs for both direct costs (labor, material, travel, subcontractors, etc.) as well as indirect costs (fringe, overhead(s), G&A, etc).  The indirect costs are to be broken out separately and should contain both the indirect pool and the base to which the pool is allocated.  DCAA has a model incurred cost proposal on its website at on the bottom left side under “Publications” titled “Incurred Cost Electronically.”

The submission is meant to identify direct and indirect costs by contract, and even more detailed, by contract type.  For those of you with Cost Reimbursable contracts, the FAR 52.216-7 Allowable Cost and Payment clause requires that you submit an adequate final incurred cost proposal within six (6) months after the end of your fiscal year.  For most of you, this means submission is required by June 30.  Failure to submit an adequate proposal within six (6) months will result in reminders letters to you from DCAA.  Once you become 6 months overdue (12 months after year-end), DCAA will make a unilateral decision for you based on prior year costs with decrements applied.

For small contractors, DCAA follows the rule of 6-24-6 which translates into submission of the incurred cost proposal by the contractor with six (6) months of year end, audit of the incurred cost proposal by the government (DCAA) within 24 months after receipt of an adequate submission, and negotiation of final costs by the Administrating Contracting Officer within 6 months after final audit results. 

Moral of this story, if one of your contracts contains the 52.216-7 Allowable Cost and Payment Clause, make sure you get your proposal in to DCAA by June 30 (or 6 months after your fiscal year end if not December 31).  If you need help putting this incurred cost proposal together, we are always here to help!

McNew & Associates, Inc.                                                     

No Stress…Just Responsibility




2 Comments so far
Leave a comment

Your way of explaining everything in this paragraph is genuinely good, every one
can simply understand it, Thanks a lot.

Comment by Alissa

An outstanding share! I’ve just forwarded this onto a friend who had been conducting a little homework on this. And he in fact bought me dinner due to the fact that I found it for him… lol. So allow me to reword this…. Thanks for the meal!! But yeah, thanks for spending some time to talk about this topic here on your web page.

Comment by free psn

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: