Government contracting project

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Athens State University *

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361

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Accounting

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Apr 3, 2024

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docx

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MacKenzie Maddox March 7, 2024 Government Contract Accounting Professor Corzine 1. Name of the company: PeopleTec, Inc. 2. Contact name: Jordan Adams 3. Job title: Accounts Payable Assistant 4. Number (or email address): (256) 349-9238 Questions  What is the process of government contract accounting? o Government contracting accounting involves understanding regulations such as the Federal Acquisition Regulation (FAR) and the Defense Contract Audit Agency (DCAA) guidelines. These regulations adhere to cost accounting standards, accounting principles, and contract-specific requirements. Also, government contracting accounting involves understanding how to calculate indirect cost rates, such as overhead, General & Administrative (G&A) to specific contracts. Another portion of this process is billing and invoicing. A contractor submits invoices based on the contractual terms and conditions and must comply with the billing requirements.  Is there any unique software used in your field? o PeopleTec used an Systems Applications and Products (SAP)-based system. However, I am aware of other government contractors using Oracle-based systems.  What is fee, and how can contractors charge fee to the government while complying with guidelines? o In government contracting accounting, a fee is the profit that a contractor is rewarded on a contract. What happens is a contractor negotiates the fee and is subject to guidelines and regulations to sustain compliance. Different fees include fixed fee, cost-plus-fixed- fee, and cost-plus-incentive-fee.  Whenever you see the term “fee,” you should think “_______.” Some contracts allow for fee, which is a built-in profit amount that is withheld until certain milestones are specified by the contract. o When I see “fee” I think of the built-in profit amount that contractors earn on top of their allowable costs.

 What are the most important things that contractors should take into consideration in doing business with the government? o Contractors should ensure they are following Government Accounting Standards and all guidelines stated in the contract. However, the most important is always ethics and integrity within business dealings and avoiding conflicts of interest. Therefore, it’s important to always be transparent.  What types of contracts are most profitable for government contractors, and why? o Profitability varies but some profitable contracts can be cost- reimbursement contracts, Time and Materials, and Cost-Plus-Fixed- Fee. The reason is that with cost-reimbursement contracts reimburse the contractor for allowable costs. Time and Materials is when the government pays the contractor for labor at fixed hourly rates plus the cost of materials. Finally, CPFF contracts are when allowable costs are reimbursed as a contractor can earn a higher fee.  Are there any recent law changes or updates to government contracting? o I was only an AP assistant, so I was not involved in this process. However, some that I may have heard of were SBA regulations and COVID relief packages.  How can indirect rates affect profitability for government contractors? o Indirect rates are not included in the contract. Therefore, they may not be fully reimbursed by the government.  Is there specific guidance (for example, the Federal Acquisition Regulation) that you use within government contract accounting? o Depending on the contract, there are different regulations to follow, such as the Army Regulations and the Government Accounting Standards Board (GASB). One of the primary sources is the FAR for acquisition and contracting. Specifically, FAR 31 outlines contract cost principles and procedures, allowable, allocable, and indirect costs.  What training, if any, is required in the government contract accounting field? o Depending on the contract, CUI, cybersecurity, and other security training are required. (I think we complete similar security training as civilians.)

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