The back page of the Standard Form 1408 features the evaluation checklist that DCAA auditors use to determine the "adequacy" of a contractor's accounting system. This form is used primarily when a flexibly priced contract (Cost Plus, Time and Materials) is in a preaward stage, and therefore a survey of your accounting system and its internal controls is in order. There are five main questions on the form, with a couple of questions broken into detailed subcategories. The question that is possibly most pertinent is the fifth and final question, to wit:
"IS THE ACCOUNTING SYSTEM CURRENTLY IN FULL OPERATION? (if not, describe in Section I Narrative which portions are (1) in operation, (2) set up, but not yet in operation, (3) anticipated, or (4) nonexistent.)"
Having an adequate accounting system that is not in full operation will count somewhat less than having a non-compliant system that is, so don't fool yourself into believing that your investment in a compliant accounting package that you're not currently utilizing will enable you to get past the preaward scrutiny of the DCAA. They'll likely stump you when it comes to the last question on the SF1408.