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Defense Contract Audit Agency

Manufacturers that work with the Department of Defense (DoD) have a particular set of rules to follow when managing the project and when preparing financial reports. Contracted projects are audited by the Defense Contract Audit Agency (DCAA) that is looking for the method and justification for cost accounting.

They may evaluate project management activities, job costing and cost accounting, as well as direct and indirect rates, to make sure businesses aren’t taking advantage of the government. Control the projects and prepare the accurate reports needed by the DoD and DCAA by deploying the right ERP solution.

DCAA has high standards

The DCAA has high standards, which are necessary for protecting the government’s money and projects. Basic spreadsheets and simple reports will not just slide in under the radar, they will be picked apart from the top to the bottom. If you can’t follow the rules, you would likely lose the opportunity to work with the DoD on future projects. Prepare your business for a DCAA audit by replacing inadequate technology with a modern enterprise resource planning (ERP) solution. The right ERP solution will be good for your business, but also support the strict rules that come with working with the government, including the following:

  1. Scope of work: Outline the scope of work for the government contract that includes a detailed breakdown of all activities. Each step or project phase can be defined, as well as each job or activity performed in each phase.
  2. Estimate direct and indirect costs: Define the direct costs, which may include labor and materials, and connect them with the activities performed in the scope of work. Allocate indirect costs based on your desired accumulation method and offer details based on specific operations. You can manage multiple budgets, in real-time, within a robust ERP solution and respond faster to deviations in order to control spending.
  3. Control billing: ERP offers electronic signatures for approvals, built-in alerts and notifications, and other controls that protect spending and billing procedures. Integration between job costing, project management activities, and your general ledger can streamline billing.

As you prepare for DoD contracts, be sure to have the right technology in place. Contact N’Ware Technologies for more information about the ERP that offers a solid DCAA platform and compliance support.

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