CohnReznick helps government contractor save millions with redesigned cost structure
Our Client’s Need
A large manufacturing and engineering services firm with new ownership and management engaged CohnReznick upon discovering that the firm uses an overly complex cost accounting and pricing structure while trying to stay competitive. The firm had multiple legacy companies, which operated on two separate accounting systems and four separate cost accounting standards (CAS) disclosure statements, that needed to be integrated.
We developed a new indirect cost rate model along with one consolidated disclosure statement. In conjunction with these unilateral changes of accounting practices, we developed a detailed cost impact (DCI) to justify that these changes were beneficial to the government.
Because of our work, the client reduced headcount by several FTEs, reduced other G&A costs by more than $1 million, got a government-approved revised disclosure statement and won a recent re-compete of its largest contract. This contractor is now well positioned for future acquisitions as it has a roadmap to integrate indirect rate and cost accounting practices to help grow its business more efficiently.
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