Incurred Cost Report (ICE) Preparation Checklist
Guidelines to determine readiness for DCAA Incurred Cost Report Preparation
(based on DCAA ICE Model 2.0.1c)
FAR 42.705-1 refers contractors to the “Model Incurred Cost Proposal” in Chapter 6 of the DCAAP 7641.90 for guidance on what generally constitutes an adequate final indirect cost rate proposal and supporting data (5). This Guide is designed to summarize those requirements. Below is list of steps to take when preparing your ICE Submission:
Gather Financial information (See ReliAscent “Data Requirements for Preparing Incurred Cost Reports").
- Applicable Schedules. Determine which schedules will be required for your submission. Schedules A, B, C(x), D(x), E, F, G, H, H-1, I, J, K, L, M, N, O & P are mandatory. ReliAscent can quickly and efficiently prepare an incurred cost proposal and help a company determine the applicable schedules in the process.
- Indirect Expense Pool Comparison. Comparative analysis of indirect expense pools with prior FY – Schedule Q may be used for comparison of prior year actual costs; however comparative analysis of budgetary data will also be required by the auditor.
- Direct Cost Test. No final cost objectives shall have allocated to it as a direct cost any cost, if other costs incurred for the same purpose in like circumstances have been included in any indirect cost pool to be allocated to that or any other final cost objective.
Direct vs. Indirect Cost Determination Contractors should make every effort to identify all costs that are direct, and by default, what remains are indirect. FAR 2.101 defines direct costs as “any costs that can be identified specifically with a particular final cost objective.” ReliAscent can help identify what category costs belong in.
Facilities Capital Cost of Money (cost of capital committed to facilities) is an imputed cost determined by applying a cost of money rate to facilities capital employed in contract performance. It is allowable if the contractor’s capital investment is measured, allocated to contracts, and costed in accordance with CAS 414. Select Schedule F for calculating the Facilities Capital Cost of Money (COM) rates. This schedule replicates the CASB Form CMF and may not be applicable depending on contract terms. If COM is authorized by the contract then this schedule must be completed. The allocation bases for computing COM are linked to Schedule H. The net book value (NBV) amounts are linked from OPTIONAL SCHEDULE F-1that computes the NBV.
- Indirect Pools. You must specify the number of Primary Indirect Pools use. The DCAA ICE Model supports up to 5 Primary Indirect Pools allocated over direct labor. If you have a Fringe Pool or a Primary Pool that is allocated over Material, these options are addressed in the Accounting Practices section. You must also specify the number of Intermediate Pools you use. The DCAA ICE Model supports up to 6 Intermediate Pools. ReliAscent recommends the fewest pools that make sense for the business. ReliAscent can help a small business determine what is most economical and efficient.
- Department Breakout. If expenses are available by department, a breakout by department should be provided.
- IR&D and B&P Classification. Although IR&D and B&P are technically not G&A expenses, they are normally allocated using the same cost input base as used for G&A. The term G&A used in the DCAA ICE Model generally includes IR&D and B&P. If base is different from the G&A base, a separate schedule would be required.
- Accounting Practices. When filling out ICE, contractors should ensure that the responses accurately reflect their disclosed accounting practices as an incorrect response can result in erroneous calculations and may display schedules that are not applicable. For companies that utilize ReliAscent as their outsourced complete accounting department, this issue is handled first day, every day.
If you need help preparing and submitting your DCAA Incurred Cost Proposal (DCAA ICE), contact ReliAscent today. Available slots are always filling up quickly during the months of April and May, and it may be too late to help by mid-June.