Government Contractor Compliance for Architecture & Engineering Firms

If your architecture or engineering firm works on government contracts, then you know how challenging it can be to remain current and compliant with the regulations for FAR and all the government agencies such as DCAA, DOT, or DOD.

Government contracts require specialized timekeeping, reporting and accounting procedures, and over the years, Axium has helped hundreds of AE firms meet the specific requirements.

The key to FAR and DCAA compliance is properly configuring your accounting software and following specific documented procedures. Axium's Ajera software for architectural and engineering firms is fully capable of being FAR and DCAA compliant software. Among other things, Ajera can help you meet auditing requirements by accounting for costs, revenue and profits by project and allowing for proper job costing. However, it is important for firms to understand that regardless of your accounting software, the proper accounting procedures must be followed to be FAR and DCAA compliant.

DCAA Audits and Architecture & Engineering Firms

DCAA audits are common and the penalty for lack of DCAA compliance can be severe. Prior to being awarded a government contract, firms are typically asked to complete a "pre-award survey of prospective contractor accounting systems," which is completed by an auditing arm of the government.

Although the DCAA will evaluate an architecture or engineering firm's accounting software, they will primarily seek to understand your accounting practices. The following are requirements that are important to understand to ensure DCAA compliant software and proper accounting procedures:

  • Segregate direct costs from indirect costs
  • Accumulate and segregate direct costs by contract and by contract line item
  • A logical and consistent method for the allocation of indirect costs
  • Costs must be accumulated under General Ledger control
  • A timekeeping system that identifies labor by cost objective and allocates this time properly
  • Interim determination of costs
  • Segregation of unallowable costs

To learn more about DCAA compliant software and accounting procedures, Download our free DCAA whitepaper DCAA: Will Your Accounting System Pass Muster?