INCURRED COST (ICE)
PREPARING INCURRED COST SUBMISSIONS
Government contractors must maintain adequate internal controls, policies and procedures, and reliable accounting systems to become DCAA compliant. Additionally contractors under Cost Plus Fixed Fee (and other contract types) must submit an adequate incurred cost proposal together with supporting data for each fiscal year within six months after the end of those fiscal years. To establish final indirect rates and direct contract costs consistent with these important procurement provisions, contractors must understand all components of an adequate incurred cost proposal and the costs that must be included within these submissions.
DCAA-Assist helps contractors to identify and capture all allowable costs that may be claimed for reimbursement in the prescribed format consistent with FAR Part 42 requirements, thus mitigating the risk of audit problems and issues. This includes an explanation of accounting requirements such as the rules for allowability and allocability required to facilitate the successful completion of an ICS. Here is a link for the DCAA’s Incurred Cost Electronic model ICE, the electronic version of the model incurred cost proposal so you may acquaint yourself with its components and structure.
Most importantly it is essential to prepare pro forma ICE rate calculations throughout the year to compare rates used for preparing progress billings/vouchers to actual rates incurred. No contractor wants to end a fiscal year owing the government money for overcharging their indirect rates. On the flip side, and no less important, does a contractor want to under-bill the government for the full amount of indirect costs recoverable under the contract.
DCAA-Assist can train you in preparing the ICE model using QuickBooks Trial Balance and a simple spreadsheet to allocate all pertinent and allowable general ledger accounts and cost pools (by labor dollars) to populate the key schedules that are used to calculate appropriate overhead and general & administrative rates.