How to Prepare for DCAA Pre-Award Survey
If you are new to government contracting, prior to being awarded a flexibly priced contract, your
contracting officer will request that DCAA perform a Pre-Award Survey to ensure your
accounting system is adequate to account for government contracts.
As you’re bidding on contracts, you’ll frequently be asked to provide a copy of an audit by DCAA or a letter from a
public accounting firm to confirm your accounting system is adequate. Performing a
self-assessment or having a public accounting firm perform the assessment ensures you are
prepared for success when DCAA evaluates your system against the SF-1408 standards.
The DCAA Pre-Award Survey is not an audit. Rather than looking at the numbers, this survey focuses
much more broadly on the accounting system itself, including the policies and procedures guiding
workflows, approvals and quality control. In fact, even if the system is not fully operational due
to current limitations, the review can often be completed.
First and foremost, government contractors are expected to maintain their accounting in
accordance with generally acceptable accounting principles (GAAP).
Moving beyond GAAP, government contractors are further expected to apply the principles of
cost accounting. Accordingly, your system is evaluated for:
● allocation and accumulation of costs
● Identification of direct costs
● Timekeeping compliance
● segregation of direct from indirect costs, and preproduction costs from production costs
● proper bookkeeping
Additionally, the system (including the supporting policies and procedures) is expected to
support future estimates and historical reconciliations of costs. For these purposes, the system
must maintain the data in the level of detail required for follow-on acquisitions and contract
closeout reconciliations.
Investing in setting up your accounting system and obtaining 3rd party certification of compliance positions your firm to be more competitive when placing bids, and to be awarded flexibly priced contracts.
