The Federal Acquisition Regulations (FAR) is comprised of 53 Parts, including three “reserved” parts that are without content. So, what in the many volumes of regulations contained in the other 50 parts and subparts relate to a “compliant” cost accounting system? The long answer is that references to the Cost Accounting Standards and phrases that contain words such as “adequacy of the contractor’s accounting system” and “cost accounting records” appear throughout the FAR, including but not limited to FAR Parts 4 (Administrative Matters), 7 (Acquisition Planning), 9 (Contractor Qualifications), and 15 (Contracting by Negotiation). But, the short answer is when it comes to the specific feature set of your accounting software, it really boils down to six parts of the FAR in particular:
Part 16 – Types of Contracts (adequate contractor’s accounting system is required for most contract types)
Part 30 – Cost Accounting Standards Administration (application of CASB rules and regulations to negotiated contracts)
Part 31 – Contract Cost Principals and Procedures (allowable and unallowable costs)
Part 32 – Contract Financing (progress payments based on costs)
Part 42 – Contract Administration and Audit Services (direct reference to DCAA and a subpart on indirect cost rates)
Part 52 – Solicitation Provisions and Contract Clauses (invoicing, limitation on payments, limitation of funds, allowable costs and payment)
These are the six specific sections of the FAR that you should most concern yourself with in relation to your current accounting software and its suitability for government contracting. To be sure, there are other parts of the FAR that are relevant and where it would be desirable to have an adequate cost accounting system in operation, such as Part 43 (Contract Modifications) and Part 49 (Termination of Contracts). However, the six parts as outlined above are most pertinent when it comes to your internal capacity and controls to administer and report on negotiated federal contracts and, most importantly, be prepared for follow-on DCAA audits. SYMPAQ is one of only a few commercially available accounting and timekeeping packages that provide true FAR compliance.