CGS was retained by a Top Engineering & Construction (E&C) firm to prepare Incurred Cost Submissions for one of its Segments performing Federal contracts. At one point, the Segment alone had revenues of over $850M. CGS was initially engaged to revise the Segment’s ICS’s from 2007 through 2012 after the Defense Contracting Audit Agency (DCAA) found errors, exceptions and inconsistencies in the prior submissions. After CGS successfully assisted in revising and re-submitting the 2007 through 2012 submissions, the Segment engaged us to prepare its ICS submissions from 2013 through 2015.
The particular Client had five (5) service centers, eighteen (18) fringe rates, and five (5) overhead pools – some of which “cascaded” from one pool to another. This made for very complicated ICS’s. Ensuring that each pool and then each contract received the appropriate costs was a major hurdle and complication for this project.
For example, there were numerous instances of fringe costs and service center costs being recorded in the wrong fringe pool. In addition to the sheer number of indirect pools, this particular client had approximately 300 different contract/CLIN and contract type combinations. The billing and project reports produced by the Segment’s accounting system were at an extremely granular level, which made it challenging to work with the massive amount of data and at the same time - adhere to the ICS format.
Accordingly, we developed an off-line methodology to roll-up the general ledger and billing details to be consistent with project cost level. In addition to some large over-hauls to the overall ICS process, CGS assisted with the following tasks in preparing the ICS’s:
Based on CGS’ work, the Segment was able to improve its overall cost recovery by over $10M+; successfully submit the incurred cost submissions on time and complete its DCAA audits.
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