Government Contracts and Steps to Take to Meet DCAA Approval Requirements
- 25
- Feb
Federal government contracts can be lucrative real money makers, as well as a steady income source for your company or corporation. As a result of competitive bidding regulations, many U.S. companies have a chance at prevailing when bidding on a government contract, so long as they make the very best quote possible for the job, as well as demonstrate they will follow up on the contract and finish the job.
If you are looking to land a government contract for your business from the Department of Defense or any of its connected organizations, keep in mind a major part of making this happen is showing your company can and will fully comply with the Federal Acquisition Regulation (listed here as FAR going forward). The Defense Contract Audit Agency (listed here as DCAA going forward) reviews service providers’ conformity with its extensive rules and FAR.
About the DCAA
The DCAA is a federal government agency acting under the Department of Defense. It functions as the federal government’s auditor and its advisor during the procurement procedure as well as for administering contracts.
In addition to compliance checks, the DCAA evaluates each professional service provider’s economic security to guarantee it can complete an agreement. DCAA also provides basic support to service providers to aid them better and recognize just how to work with the government as well as DCAA auditors. Nonetheless, because it should act as an independent auditor, the DCAA has limited capability to offer customized suggestions to professionals.
Financial Capability Review
Prior to when the U.S. government awards a new contract, it requires verification that the service provider can complete it. The specialist needs to have the resources to purchase all required inventory or equipment, on top of that, it should be solvent with little threat of personal bankruptcy or possible other events that might impact its operations.
On many occasions the U.S. government agency a company wants to do business with, may require a review by the DCAA. This process is much like what your company is required to complete when it’s seeking a financial investment or a working capital loan from a bank.
The federal government will certainly ask for P & L statements going back several years and business forecasts along with detailed information concerning your debts as well as other loans your business owes. The auditor’s function is to provide a full proper evaluation, with complete and correct financial data, which will give the contracting officer a concise view of your company finances and cash on hand completing an evaluation of your contract bid.