Do I need all of this to start?

No. To quote a fixed-price buy under the simplified acquisition threshold you need registration, a price you can stand behind and the ability to deliver. The rest of this module becomes relevant as you take on cost-type work, larger contracts or defence work with controlled information.

When should I get an accounting system in place?

Before you bid cost-type work, because it can be examined before award. If cost-type work is in your plan, treat the system as a prerequisite rather than a consequence.

What is the most common expensive mistake?

Doing work that was not authorised by the contracting officer, and poor labour records. The first means unpaid work; the second means a finding, a repayment, or an inability to bid the work you want.

How much does compliance cost a small firm?

Less than people fear on the accounting side, where the cost is discipline rather than software, and more than people fear on cybersecurity for defence work, where it is a real programme with real spending. The right question is not what it costs but which parts of it your intended work actually triggers.

Is any of this legal advice?

No. This course describes how the system works in plain terms. The FAR, the agency supplements, SBA regulations and export control law control, and a real dispute or a certification question is worth a lawyer who does this for a living.

Course, module 16 of 16

Audits and compliance

The last module and the one that decides whether you can grow. Most of what follows takes months to put in place, which is why it is worth knowing about long before anybody asks you for it.

checked before a teaming partner is ever suggested

By the end of this module you will be able to

Say which kinds of audit exist and which of them could apply to you
List what an adequate accounting system has to be able to do, and check yourself against it
Run timekeeping the way an auditor tests it rather than the way it is convenient
Know what an incurred cost submission is before the year in which you owe one
Identify which of the security, quality and sourcing regimes apply to your work, now rather than mid-bid

When an audit happens, and what kind

Not every federal contractor is audited, and a small firm doing fixed-price commercial-item work may never be. The exposure rises with contract type, size and the kind of data you were asked for.

Pre-award accounting system survey. Before a cost-type award, to decide whether your system is adequate to account for costs under that kind of contract. This can happen before you have ever held a federal contract.
Proposal audit. On larger proposals where certified cost or pricing data was required.
Incurred cost audit. After the fact on cost-type work, examining what you actually claimed and settling final indirect rates.
Floor checks. Unannounced verification that people are where the timecards say, doing what the charge codes say.
Compliance reviews. Of specific obligations: cybersecurity, quality, sourcing, small business subcontracting.

Keep reading

The rest of this module opens with your name and email

All sixteen modules open on this device for about six months. No card and no password.

Still to come in this module

What "adequate accounting system" actually means
The incurred cost submission
Business systems, beyond accounting
Cost accounting standards
Security, quality and sourcing
What each regime costs in time, roughly
Ethics, and the rules that are stricter than you expect
The words in this module, defined
The questions people ask at the end