FAR FAR 16.301-3 — Cost-Reimbursement Contract Adequate Accounting System
Establishes the requirement that contractors awarded cost-reimbursement contracts must have an accounting system adequate for determining costs applicable to the contract.
When This Clause Applies
Required for all cost-reimbursement contract awards.
What This Means for Contractors
Without DCAA-confirmed accounting system adequacy (per Standard Form 1408), the government cannot award cost-reimbursement contracts. Contractors must achieve adequacy before pursuing cost-type work. Adequacy is determined by DCAA audit using the SF 1408 criteria.
Common Pitfalls
- 1Pursuing cost-type contracts before achieving accounting system adequacy
- 2Inadequate segregation of direct from indirect costs
- 3Manual labor distribution rather than systematic
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