Subcontractor to Prime

Subcontractors may be required to comply with the same FAR/CAS standards as Prime contractors.

Approved Accounting System

• Segregate direct costs from indirect costs
• Accumulate contract costs by cost element by contract, project, task or cost objective for each cost element (labor, materials, subcontracts, other direct costs, fringe, overhead and G&A)
• Maintain an adequate timekeeping system
• Maintain adequate labor and accounts payable distribution systems
• Account for unallowable costs and exclude such costs from billings, claims and proposals
• Make certain direct costs and indirect costs are controlled by the general ledger
• Capture pre-contract costs separately
• Maintain homogeneous indirect cost pools and allocate indirect costs to contracts, projects, tasks or cost objectives based on a beneficial, causal and equitable basis
• Comply with financial clauses like the Limitations of Costs/Funds and Progress Payments clauses
• Make interim accumulation of costs in the books of account, at least monthly
• Track costs by contract line item and Provide reliable historical accounting data for follow-on procurements

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