New potential DCAA threat - rejected cost vouchers in 2012

The DCAA appears to be pushing for Provisional Billing Rate (PBR) proposals earlier than past years. PBR proposals have suffered a tortured history the past few years. They have alternately been ignored and considered mandatory by the DCAA. Now, we’re getting the sense that the DCAA may be insisting on proposals even if indirect rates don’t change. One clients said their auditor advised they should get their billing rate proposal in the first of the year to assure that there is no gap in billing.

As a reminder, under cost-plus type contract having FAR clause 52.216-7 and 42.704, contractors must establish provisional billing rates for those contracts. This allows contractors to use fixed indirect rates for billing purposes for a specific annual period. The risk contractors now face is the DCAA or contracting officer rejecting invoices sent to the government in the new year without a new negotiated PBR.

Tech Biz has the tools to perform this analysis and advise clients on indirect rate strategies that ensure profitability and growth in the government contracting environment. With cashflow being more critical now in this austere budget environment, it's best to be prepared rather than surprised by government actions.