CFO Posted November 12, 2019 Report Share Posted November 12, 2019 does anyone know how DCAA would want legal and accounting costs specific to contracts in a foreign country accounted for? we have always treated legal and accounting as G&A costs; however we have some costs that are specifically grown out of having to comply with in-country tax laws, reporting, filing tax returns to be in compliance in that country. We have not charged legal and tax work as direct costs before, but they do not exactly fit a homogenous definition either. Link to comment Share on other sites More sharing options...
Retreadfed Posted November 12, 2019 Report Share Posted November 12, 2019 Its not how DCAA would view this practice, but what does the FAR say on this? Look at FAR 31.202(a) and see if charging these costs direct would comply with the guidance set forth there. To me, the key phrase is "in similar circumstances." One thing to remember is that 31.202 is a part of cost reimbursement and T&M contracts because of FAR 52.216-7. Link to comment Share on other sites More sharing options...
here_2_help Posted November 13, 2019 Report Share Posted November 13, 2019 17 hours ago, CFO said: does anyone know how DCAA would want legal and accounting costs specific to contracts in a foreign country accounted for? we have always treated legal and accounting as G&A costs; however we have some costs that are specifically grown out of having to comply with in-country tax laws, reporting, filing tax returns to be in compliance in that country. We have not charged legal and tax work as direct costs before, but they do not exactly fit a homogenous definition either. Don't your in-country operating locations have their own indirect costs? Charge 'em there; but not as direct costs of the contracts they are performing. Link to comment Share on other sites More sharing options...
CFO Posted November 13, 2019 Author Report Share Posted November 13, 2019 we have never charged audit/tax work as direct expenses before, directly to a contract. it has historically been treated as G&A costs, G&A indirect cost pool. in this particular year we moved from corporate governance costs of registration and establishment of business in this foreign country which we charged to G&A, to annual audit work that is specific to audit work and tax work to be in compliance in the country and therefore, in contract compliance relative to only two contracts; therefore, this is a change, but it does not seem equitable to charge domestic or other country projects in this case when this work is benefiting only work in this foreign country. In reading FAR, I can see logical arguments both ways; however, while direct expensing will be an allocation to both a FFP and a CPFF contract, it does results in a higher value billed than the result of this expense being charges to a G&A account. Link to comment Share on other sites More sharing options...
here_2_help Posted November 13, 2019 Report Share Posted November 13, 2019 2 hours ago, CFO said: direct expensing will be an allocation to both a FFP and a CPFF contract, it does results in a higher value billed than the result of this expense being charges to a G&A account. I don't know your circumstances or whether you are subject to CAS; however, I like the result of the change! Link to comment Share on other sites More sharing options...
joel hoffman Posted November 14, 2019 Report Share Posted November 14, 2019 20 hours ago, CFO said: it does not seem equitable to charge domestic or other country projects in this case when this work is benefiting only work in this foreign country. In reading FAR, I can see logical arguments both ways; however, while direct expensing will be an allocation to both a FFP and a CPFF contract, it does results in a higher value billed than the result of this expense being charges to a G&A account. ...But, as you say, the costs will be billed/allocated to the benefiting contracts, right? That seems fair. Link to comment Share on other sites More sharing options...
formerfed Posted November 14, 2019 Report Share Posted November 14, 2019 The only glitch might be whether subject to CAS or not as Here to Help mentioned Link to comment Share on other sites More sharing options...
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