Difference between revisions of "PreAward Survey of Prospective Contractor Accounting System (including SF1408)"

Revision as of 10:55, 18 December 2013

The Pre-Award Survey is normally done using the government Standard Form (SF) 1408. It is done prior to a cost type contract award, and is done to demonstrate compliance with FAR 16 which prohibits the award of a cost type contract to a contractor that does not have an adequate accounting system. There are 2 sections to this survey.

Section I - Recommendation

Section I is the recommendation. The Contracting Officer (with the assistance of DCAA or the Administrative Contracting Officer (ACO) makes a determination regarding the accounting System. They are:

Unacceptable

• 1. No. The contractors prospective Accounting System is unacceptable for cost type contracts. In this case the contracting officer needs to explain why it is not acceptable.
• 2. The prospective contractor's Accounting System is acceptable for award of prospective contract. Normally there is a recommendation that a follow on Accounting System review be performed after contract award.

Section II - General

SECTION II - EVALUATION CHECKLIST

• 1. EXCEPT AS STATED IN SECTION I NARRATIVE, IS THE ACCOUNTING SYSTEM IN ACCORD WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES APPLICABLE IN THE CIRCUMSTANCES?
• 2. ACCOUNTING SYSTEM PROVIDES FOR:
  • a. Proper segregation of direct costs from indirect costs.
  • b. Identification and accumulation of direct costs by contract.
  • c. A logical and consistent method for the allocation of indirect costs to intermediate and final cost objectives. (A contract is final cost objective.)
  • d. Accumulation of costs under general ledger control.
  • e. A timekeeping system that identifies employees' labor by intermediate or final cost objectives.
  • f. A labor distribution system that charges direct and indirect labor to the appropriate cost objectives.
  • g. Interim (at least monthly) determination of costs charged to a contract through routine posting of books of account.
  • h. Exclusion from costs charged to government contracts of amounts which are not allowable in terms of FAR 31, Contract Cost Principles and Procedures, or other contract provisions.
  • i. Identification of costs by contract line item and by units (as if each unit or line item were a separate contract) if required by the proposed contract.
  • j. Segregation of preproduction costs from production costs.
• 3. ACCOUNTING SYSTEM PROVIDES FINANCIAL INFORMATION:
  • a. Required by contract clauses concerning limitation of cost (FAR 52.232-20 and 21) or limitation on payments (FAR 52.216-16).
  • b. Required to support requests for progress payments.
• 4. IS THE ACCOUNTING SYSTEM DESIGNED, AND ARE THE RECORDS MAINTAINED IN SUCH A MANNER THAT ADEQUATE, RELIABLE DATA ARE DEVELOPED FOR USE IN PRICING FOLLOW-ON ACQUISITIONS?
• 5. IS THE ACCOUNTING SYSTEM CURRENTLY IN FULL OPERATION? (If not, describe in Section I Narrative which portions are (1) in operation, (2) set up, but not yet in operation, (3) anticipated, or (4) nonexistent.)

Related Pages

Cost Plus Incentive Fee (CPIF). -- This page talks about the requirements for a CPIF contract.