Government contractors operating on a December 31, 2020 fiscal year end (FYE) need to complete and submit FY 2020 ICPs in accordance with the six month post-FYE deadline in FAR Clause 52.216-7, Allowable Cost and Payment. The submission deadline of June 30, 2021 is just around the corner. And, while it is imperative to be prompt with your submissions, it is just as important that the submissions are adequate.
The ICP can be a labyrinth of at least 12 minimum schedules with 24 or more detailed, inter-related schedules likely. Given this, the potential exists to overlook many of the intricacies of the information required in an adequate ICP. In consideration of the impending June 30, 2021 deadline, we have outlined ideas for avoiding some the most common inadequacies as you prepare and review your ICP prior to submission.
- Ensure Schedule N, Certificate of Final Indirect Costs is signed and dated by at least a Vice President of the business segment or the Chief Financial Officer (CFO) and included with your ICP submission.
- Double-check to ensure the schedule totals reconcile and information is consistent among different inter-related schedules. The Incurred Cost Electronic (ICE) model includes a flowchart to help visualize the correlation between inter-related schedules.
- For changes made in the adjustment columns within the schedules, provide notes/comments to explain the adjustments.
- Disclose all intermediate allocations and adequately describe the allocations.
- Exclude unallowables from claimed costs but make sure that unallowable costs stay in the General and Administrative (G&A) base.
- Schedule H, Contract Direct Costs by Contract/Subcontract and Indirect Expense Applied at Claimed Rates should list and group contracts by contract type.
- Ensure that proper calculations of Government Participation for all indirect cost pools are provided.
- Contracts that are specified as ready to close on Schedule I, Schedule of Cumulative Direct and Indirect Costs Claimed and Billed on Cost/Flexibly Priced and T&M Contracts and Subcontract should also be specified as ready to close on Schedule O, Schedule of Contract Closing Information for Those Contracts Which Work Effort was Completed During FY.
- The Subject to Penalty Clause field must be completed on Schedule I.
- You must complete and provide Schedule J, Subcontract Information.
- On Schedule M, Listing of Decisions/Agreements, or Approvals Affecting Direct/Indirect Cost and Description of Accounting or Organization Changes, a negative response needs to be provided if there were no subject actions during the fiscal year.
For over 40 years, CohnReznick has provided comprehensive services to assist government contractors with a full life cycle approach to winning and managing contracts. We ensure your financial and procurement processes are compliant, efficient and effective - so you can focus on what matters most, profitable growth.