Are Your Subcontractors Adding Value?

Recent guidance from DCAA suggests they may start disallowing certain indirect costs for the prime on contracts where the subs are doing more than 70% of the work.

"Adding Value" is, of course, subjective. Auditors will be looking for evidence that subcontracting out the majority of a contract is a net benefit for the government. If you are a prime with contracts that are fulfilled by subs in excess of the 70% threshold, be prepared to justify how that decision adds value for your government customer.

Written by G. Chris Brown

View all posts by: G. Chris Brown

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