Most Government Contractors, though certainly not all, operate using a fiscal year that ends December 31. If that sounds like you, your Incurred Cost Submissions (ICS) deadline is coming fast. (And, if you operate on a different fiscal calendar, then your ICS deadline is 6 months after the end of your fiscal year.)
So, if you find yourself scrambling to wrap up your ICS reporting by June 30, you’re not alone. Every year we help clients ensure their ICS submissions are completed accurately, compliantly, and on time.
What Are Incurred Cost Submissions? In a nutshell, the ICS is used to determine a company’s actual indirect costs versus the indirect costs provisionally billed for a fiscal year. While this sounds simple, your ICS report must correctly answer the 42 questions- on the DCAA Incurred Cost Submissions Adequacy Checklist.
DCAA is required to complete their adequacy review of the ICS within 60 days of receipt. Once a risk determination has been made (low versus high), the low risks go into a pool and through a random selection process ICS’ are selected for audit. If the ICS is deemed low risk and wasn’t selected for audit, the ICS will be closed and a low-risk audit letter will be generated.
High-risk submissions are automatically audited. Audited ICS’ must be completed within 12 months of adequacy determination.
The Contractor Submission Portal
There’s a new option available to Government Contractors for electronically submitting incurred cost proposals — the Contractor Submission Portal (CSP). The CSP is located in the Procurement Integrated Enterprise Environment (PIEE). This portal provides a single place for contractors to submit their ICS electronically.
Once in the portal, you’ll have three options: Submit a New Proposal, Update Existing Proposal, and Withdraw a Proposal. Each option generates an email to the cognizant Field Audit Office (FAO).
Using the CSP is optional, and comes with several benefits:
- You can more easily transfer large Incurred Cost Submissions
- You’ll get a receipt for your submission
- You can be confident that the DCAA is working with the most current version because of central storage
- It’s easy to withdraw or update existing proposals
What you Need to Know About the ICS
Contractors must maintain excellent records and documentation so that in the event of an audit they have the proof needed to justify any costs.
The ICS Challenge
Most Government Contractors who find themselves challenged in compiling ICS reports are struggling in one of the following areas:
- Understanding the ICE Model and the requirements for filing
- Knowledge of deadlines and extensions
- Understanding the consequences of non-compliance
This time of year can be hard for contractors unfamiliar with ICS reporting and we’d love to help you simplify the process by developing stronger systems and implementing better practices to make next year’s ICS season a walk in the park. Contact us to learn more.
WJ Technologies is a leading provider of accounting software and services for Government Contractors. We tailor our services to meet your company’s needs offering accounting systems consulting, software evaluation and decision support, accounting services, staff augmentation, training, and government contracting services. Contact us to learn more about how we can help you!