What Do You Need To Know About Incurred Cost Submissions

1. What Do You Need To Know About Incurred Cost Submissions All federal contractors have to provide Incurred Cost Submissionsor ICS. It’s especially true for the contractors holding cost-type or time and materials contractors. ICS is a universal requirement, regardless of agency customer. Every contract requiring ICS will include the “Allowable Cost & Payment Clause” of the Federal Acquisition Regulations and the “T&M Payment Clause.” If you wish to learn more about the subject, you should continue reading. ICS has several names, including incurred cost electronic submission, final indirect rate proposal, incurred cost proposal, indirect cost rate submission, ICP, ICES, and others. The name isn’t of any consequence. It’s just the mechanism for the true-up of your actual indirect expenses to the indirect costs billed provisionally for one contractor in one fiscal year. ICS covers several broad areas. When it comes to submitting your expenses, you have to do it six months after the end of a fiscal year. Therefore, if your fiscal year ends on 12/31, your submission won’t be due later than the following June 30 for each fiscal year in which you incur costs under an applicable type of contract. You have to make exclusive considerations, especially when circumstances like acquisitions, mergers, or changes in fiscal years are present.

2. More about ICS According to the DCAA, contractors must submit their ICS for every business unit holding applicable contracts subject to the Allowable Cost and Payment clause. Just like Cost Accounting Standards or CAS disclosure statements, you’ll need to provide an ICS for Home Office entities or Shared Service Business Units where the expenses originate and eventually flow into the business units holding applicable types of contracts requiring an Incurred Cost Proposal. So, what makes ICS so important? Why is it a requirement? In simple terms, the ICS is somewhat similar to personal income tax returns. As every American has to file taxes, government contractors have to do the same thing. The only difference is that they’ll provide the ICS. When you bill incurred costs under cost-type and T&M contracts, you use provisional or estimated indirect rates. It’s like the withholding process for incurred tax purposes. Contact Us Edward D. Moore, dcaa Consulting LLC Email: dcaaconsulting@gmail.com Alternate Email: emoore@dcaaconsulting.com Phone: 336-880-9040