New Proposed Rule Set to Change the Regulations Governing Time-and-Materials and Labor Hour Contracts
by Jason Levine and Spencer Marusco
To better accommodate the authorization to use Time-and-Materials and Labor-Hour contract payment provisions, the Federal Acquisition Regulation (FAR) Council on July 27, 2011 proposed a rule change to amend the FAR.  The proposed rule will impact government contractors' administrative and payment responsibilities pertaining to Time and Material (T&M) and Labor-Hour Contracts and will more closely align T&M contracts with cost-reimbursement contracts.

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DCAA Increases Audit Efforts Related to of Lobbying Costs
by Sajeev Malaveetil, Lentyn Myers and Gary Tsai

As industry professionals are well aware, the Defense Contract Audit Agency (DCAA) audit focus can often change as the agency's guidance is updated or as a result of changes to regulations.  Years after an audit alert on lobbying costs was issued in 2008, the DCAA recently issued new audit guidance, which has resulted in an increased rigor in the auditing of lobbying costs.  As a result, contractors are increasingly becoming subject to greater scrutiny related to their lobbying efforts – specifically efforts related to legislative earmarks. 


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Contractor Business Systems: Generally Speaking, From a Control Perspective, the Environment Matters
by Mike Mellor, Sajeev Malaveetil and Kelly Lynch

This article is the first in a series focused on the increasing oversight and scrutiny of Government contractors' business systems.  On May 18, 2011, the Department of Defense issued an interim rule amending the Defense Acquisition Regulation Supplement (DFARS) to address contractor business systems.  The particular focus of this article is to discuss the importance of the general control environment, which in addition to being a critical criteria in an acceptable Accounting System, can impact other Government audits.


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Agency Spotlight: Commission on Wartime Contracting
by Bryant Le

The Commission on Wartime Contracting's authorizing statute ceased at the end of September 2011.  This article highlights the agency's formational purpose and the key findings and recommendations as provided in the agency's final report issued to Congress in August 2011. 


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Regulatory Updates:
Proposed T&M and Labor-Hour Provisions Rule  |  Uniform Suspension and Debarment Requirement  |  TINA Interest Calculation, Contract Closeout  |  Only One Offer  |  Increase the Use of Fixed Price Incentive (Firm Target) Contracts  |  CAS Exemption Removed


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  Timely Opportunities

Tax-Saving Depreciation Moves for Businesses Before December 31
It's not too late. You can still take steps to slash 2011 taxes for your business. If you are buying equipment, computers, software, vehicles, office furniture and more, there are valuable tax breaks available this year that are scheduled to expire or become less attractive next year. There is also a special deduction in 2011 for real property improvements. This article explains what you need to do by December 31 to take advantage.
Copyright © 2011

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  Government Contracting

Timekeeping Is a High Risk Area
Contracted work can be labor intensive, with charges related to hours put into a job comprising a significant amount of costs. Systems for tracking and charging for time are often easy to manipulate, so the feds keep a close eye on timekeeping systems. Here is what the government expects from its contractors to help ensure they bill reliable labor expenses.
Copyright © 2011

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  Government Contracting

What You Can Include in Your Indirect Expense Pool
Whether you can claim the costs of attending conventions or sponsoring conferences depends on three criteria: disseminating information, stimulating production and improving productivity. That seems simple enough, but government auditors could disallow costs based on the name or description of an event. Here is why you need to be sure you clearly document why you sent staff to a conference, especially if the gathering appears unrelated to the business of federal contracting. 
Copyright © 2011

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  Operations

Outsourcing: Eight Steps to Help Mitigate Risks
In today's business world, most companies outsource some tasks. Many of them send work overseas. Outsourcing can save money, and in some cases, even save some companies from going out of business. But whether you outsource abroad or up the street, there can be risks involved. Here are some of the potential problems, as well as eight ways to help mitigate the risks.
Copyright © 2011

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