By Cameron Schwehr, CPA and Curt Olson, CPA
Numerous engineering, architecture and construction firms have jumped into government work as a result of the economy or hearing word of profitability without fully understanding the ramifications of Federal Acquisition Regulations (“FAR”) or the related requirements for the competion of a FAR audit. Finding out too late about the requirements under FAR can result in lost bid opportunities, lower potential job profitability, unwanted audits from the DCAA and last minute, required FAR audits. An error in a few percentage points could result in lost revenue in the millions over time.
Different government agencies may include varying FAR based obligations in their contracts. These can range from requiring all contract bids to include a company’s FAR compliant overhead rate to providing a copy of the company’s audited overhead schedule and related footnotes. If a company is currently working with, or plans to work with, a government agency it is critical to develop an understanding of what is required for each agency under FAR part 31 and the related cost accounting standards. With a long history in the engineering, architecture and construction fields, Wipfli/Bauerle has the experience to ensure that you are in compliance with current FAR provisions and well-prepared for future FAR based opportunities. At Wipfli/Bauerle, we will partner with you to:
- Complete the audit of your overhead schedule and related footnotes
- Develop the most advantageous and compliant overhead rate
- Understand the applicability and requirements of Cost Accounting Standards
- Understand the requirements under FAR part 31
Wipfli/Bauerle has extensive experience in executing FAR audits. Avoid potential problems that could delay your payments or have you leaving money on the table. If you are using too low of an overhead rate – or worse – have to pay money back after the contract is complete, it may be because you were using too high of a rate which was later determined unallowable by the DCAA or other government agency.