Background

A regional real estate holdings and management company was preparing to enter its first federal cost-reimbursable contract, which introduced more rigorous government contracting requirements than it had previously encountered.

The challenge

Predominantly a commercial business, the client faced the daunting task of establishing a compliant infrastructure on an extremely aggressive timeline to meet FAR Part 15 cost-reimbursable contracting guidelines and Cost Accounting Standards. Without a sufficient accounting and compliance program, the company would not have been awarded a significant cost-type contract. The client also required ongoing support throughout the life of the contract, including an outsourced compliance function and direct interfacing with government officials and auditors to help ensure regulatory expectations were met.

Our solution

We assessed the client’s existing business processes to identify gaps against compliance requirements and remediated those gaps by implementing a robust accounting and compliance program. Our team supported U.S. government audit and contracting officer discussions; provided leading practice tools, templates, resources, policies, and procedures; and delivered general government contracting compliance support.

We set up the entire federal award compliance infrastructure on an aggressive timeline and supported the preparation and execution of organization-wide operations and compliance training related to federal awards. We also drafted responses and provided context to government audit questions and contract negotiations.

Results & impact

The government deemed our client’s accounting system adequate to receive funding via federal flexibly priced awards. As a result, the client was awarded an approximately $170 million contract over a 10-year period, with favorable terms enabling sufficient profit margin returns. The client met the aggressive timeline and demonstrated compliance. We continue to provide compliance support as their outsourced U.S. government compliance function.

Bottom line

This case is a compelling success story that demonstrates our ability to design and implement a robust cost accounting and compliance structure on a condensed timeline. CohnReznick provides best-in-class service tailored to client needs and circumstances, enabling commercial businesses to confidently enter and thrive in the government contracting space.