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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