We’ve mapped out the requirements of SF 1408, and we’ve distinguished the pre-award survey from other accounting-related reviews, but we’d like to offer some key considerations and resources for navigating SF 1408. There are basic questions to ask to find out where your business is, and there are some great resources you can use to move forward once you know your position.
Questions to Ask Before an SF 1408 Pre-Award Survey
When you have definite, concrete answers to the following questions, you’ll know that your business is ready to undergo the survey; if not, you’ll be better positioned to set a plan on the areas you need to improve.
- Have we completely aligned our accounting records and accounting procedures with the principles outlined in the GAAP (Generally Accepted Accounting Principles)?
- Are all indirect costs separated from direct costs in our ledgers? Do we have additional segregation between unallowable costs and indirect/direct costs?
- Have we set up a timekeeping system that abides by DCAA standards and has proven to be operable and accurate? Can it pass an audit in theory and practice?
- Are our employees prepared to pass a DCAA floor check audit?
- Have we set up our timekeeping system accordingly? Do our employee time cards match up with specific job cost summaries, paycheck details, and the billing invoice?
- When it comes to travel expenses and documentation, have my employees been abiding by the JTR (Joint Travel Regulations) guidelines?
- Have we done a thorough job of outlining all company policies and procedures? Are our employees following them? Does each employee have a genuine understanding of policies external to our organization (i.e., FAR)?
If you can’t answer a definitive “yes” to any of these, then you’ll want to focus on that area and bring it up to code. Although failing a pre-award survey isn’t the end of the world, it doesn’t make your job any more manageable, and it can hinder your company’s ability to carry out vital wins and contracting projects.
Some Resources to Help with SF 1408
Most government contractors preparing for an SF 1408 are new to the industry, and they often don’t know where to access the right documents to help them prepare. So, before starting a survey, businesses can use the following documents to help set their agenda and direct their efforts.
- The Pre-Award Accounting System Adequacy Checklist: This checklist covers everything your business needs to do to pass an SF 1408 survey. Whether you’re new to government contracting, new to cost-reimbursement contracts, or receiving progress payments, this document covers it all.
- The Incurred Cost Submission Adequacy Checklist: To guarantee compliance under the FAR contract requirements, you need accurate documentation of incurred costs (direct/indirect). This checklist will help you assess those needs and address any necessary improvements.
These resources will give you a better understanding of what’s needed for a proper accounting system in government contracting and how to maintain continuous compliance. If there’s an area you’re not quite sure about, you can always reach out to your administrative contracting officer (ACO) for help.
One of the best actions you can take to prepare your business for a pre-award survey, an accounting system review, or any other type of audit is implementing a technology to do the heavy lifting for you. When you move your accounting, HR, timekeeping, and resource planning to Microsoft Dynamics 365 for Government Contractors, you can expect a new level of safety when it comes to these processes. Because the software can be designed to match all government contractors’ requirements, the pressure of audits and reviews is lifted, and you can operate soundly without having to worry when the DCAA or DCMA comes knocking.
If your company is thinking of migrating its internal systems to a more effective and transparent software, reach out to GovCon365 today. If you have any comments or questions, don’t hesitate to ask them in the comments below. We’re always here to help.