Government Contract Accounting
Expertise in Federal Compliance, Audit Readiness, and Strategic Financial Execution
Play It Safe with Your Government Contracts—Don’t Leave Compliance to Chance
When your business enters into an agreement with the federal government, the accounting stakes immediately rise. Even minor missteps in your cost structure, invoicing, or internal controls can trigger audits, funding delays, or even disqualification from future awards.
At Peter Witts CPA PC, we provide comprehensive government contract accounting services built around FAR, CAS, and DCAA compliance. Whether you’ve just won your first contract or are managing a portfolio of multi-year federal awards, we help you build audit-proof systems, track allowable costs, optimize indirect rates, and prepare for long-term success.
Why Government Contract Accounting Requires Specialized Expertise
Government contractors are subject to a wide range of financial regulations, including:
- The Federal Acquisition Regulation (FAR)
- Cost Accounting Standards (CAS)
- Oversight from agencies like the Defense Contract Audit Agency (DCAA) and NIH/DOE/DoD grant offices
Accounting System Design for Government Contractors
Every federal contractor must maintain an accounting system that complies with FAR Subpart 31, and for cost-type contracts, often CAS standards as well. Our team designs and implements systems that:
- Accumulate direct and indirect costs at the project level
- Allocate indirect costs in accordance with negotiated rates
- Produce financial reports that satisfy both agency reviewers and internal managers
- Support electronic submission tools and audit documentation
We use and support systems like
QuickBooks,
Deltek,
Unanet, and custom-built platforms depending on your award structure.
Incurred Cost Submission (ICE) Preparation
Cost-reimbursable contractors must submit an adequate final incurred cost proposal annually under FAR 52.216-7. We prepare your ICE submission using the DCAA ICE Model, ensuring:
- Complete supporting data for all cost pools
- Accurate reporting of indirect rates and contract billings
- A signed Certificate of Indirect Costs
- Audit-ready formatting for DCAA acceptance
Failing to submit or submitting inadequately can delay payment and draw scrutiny. Our team ensures your proposal is both complete and defensible.
Cost Proposal Development & Support
When bidding on federal contracts—especially those exceeding $750,000—you must submit certified cost or pricing data and comply with the disclosure formats outlined in FAR 15.408 Table 15-2. We help you prepare:
- Full cost breakdowns with fringe, overhead, and G&A rates
- Pricing narratives and justifications
- Forecasted indirect expenses
- Compliance checklists for responsiveness and acceptability
Whether you're submitting to the DoD, NIH, DOE, or another federal agency, our support ensures your pricing is competitive and compliant.
DCAA Compliance & Audit Support
Peter Witts CPA PC has more than 20 years of experience working inside and alongside the DCAA. We understand audit triggers, reporting requirements, and the review objectives of government auditors. Our services include:
- Pre-award and post-award audit readiness reviews
- Direct support during DCAA field audits
- Evaluation of DCAA audit reports and rebuttal drafting
- Strategic guidance on questioned costs, cost allowability, and indirect pool issues
We act as your liaison, protecting your interests while ensuring you meet your obligations.
We empower our clients to grow with confidence by delivering high-quality, customized financial services that meet the exacting standards of the DCAA, NIH, DOE, and other federal agencies.
Frequently Asked Questions
What is “government contract accounting,” and how is it different from regular accounting?
Government contract accounting involves following specific federal rules, standards, and compliance requirements (e.g. cost allowability, audit readiness, indirect rates, DCAA standards). Unlike general accounting, your financial systems need to withstand audits, cost proposals, and strict oversight. We structure your accounting and reporting so you stay compliant and reduce risk.Do I need to worry about DCAA audit compliance?
If you hold or are bidding on U.S. federal contracts (especially cost-reimbursable, time & materials, or fixed price with cost elements), the Defense Contract Audit Agency (DCAA) may audit your accounting systems. We can help you build or review systems so you pass audits when they arrive.Can you help with indirect cost rates, cost proposals, and incurred cost submissions?
Yes — we support designing indirect cost rate structures, preparing cost proposals, and submitting incurred cost reports. These are critical tasks in government contracting, and we ensure your supporting records align with regulatory expectations.How much experience do you have in the federal contracting space?
Peter Witts CPA PC has over 36 years of experience in government contract accounting, including first-hand DCAA knowledge. We’ve worked with clients across DoD, NIH, DOE, and other agencies, helping them navigate the compliance landscape.What kind of businesses or projects do you work with?
We work primarily with companies engaged in federal contracts or grants (especially research, development, support services). If your business isn’t in that space, we’ll help you determine whether our services are the right fit or recommend alternatives.How do I get started with you?
You can schedule a free consultation via our website. During that call we’ll explore your current standing, challenges, and needs, and map out how we might support you. (Then we’ll formalize scope, pricing, and next steps.)What should I provide for an initial assessment?
Financial statements, accounting policies, prior audits (if any), contracts and grant agreements, cost accounting structure, payroll records, indirect cost allocations, and any compliance documents. We’ll review what you have, identify gaps, and propose next steps.How often will we interact / how do you deliver services?
That depends on the scope. For outsourced accounting, we could work on a monthly or quarterly basis. For compliance or audits, we may engage more intensively. We'll agree up front on communication frequency, deliverables, and review cycles.What are your fees or how is billing handled?
Our fees are fixed monthly fees and depend on the complexity and scope of your work — number of contracts, volume of accounting entries, compliance risk, etc. We’ll provide a proposal after our initial assessment. We only work on an hourly basis for audit support services for audits relating to government contracts or grants conducted by government agencies or outside CPA firms.What if my business is outside of your specialization—can you still help?
At Peter Witts CPA PC, we focus exclusively on our core strength: federal contract and grant compliance. We serve businesses operating within the government contracts and grants space, offering specialized outsourced accounting and tax services tailored to the unique requirements of this industry. This is our sole focus — we don’t try to be everything to everyone. Our expertise is deep, not broad, and it’s dedicated to helping government contractors navigate complex compliance and maximize their opportunities.What happens if there's a federal audit or examination?
We support audit responses, documentation requests, and work with your team to ensure you respond properly. Because we build systems with compliance in mind, we aim to minimize surprises and help you maintain defensible records.How do you keep up with changing federal regulations and compliance standards?
We continuously monitor federal regulatory updates (DCAA rules, OMB circulars, FAR/DFARS, audit guidelines) so our clients’ accounting systems remain in alignment with best practices and compliance requirements.
