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What You Should Know About DCAA Compliance

Being awarded a government contract can be a lucrative opportunity for your business in the Aerospace and Defense industry

In order to win those contracts, your company needs to achieve and maintain Defense Contract Audit Agency (DCAA) compliance. That’s in addition to meeting the standards of AS9100 compliance, ISO 9000/01 compliance, and any other regulation that applies to your business.

Cre8tive Technology and Design is ITAR registered. We will assist you with your compliance needs.

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How Cre8tive Can Help with DCAA Compliance Requirements

If you are wondering: "What is DCAA compliant?" and "What DCAA guidelines must be followed?" The professional governmental compliance experts at Cre8tive are here to help.

In this blog, our first in a series on DCAA compliance, we have provided guidance regarding what the DCAA is and how contractors within the aerospace and defense industry can successfully meet compliance requirements.

Aerospace and defense companies that partner with Cre8tive exceed standards set by the U.S. Department of Defense (DoD). thanks to our DCAA solutions.

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What is the DCAA? DCAA Compliance Meaning and Context

DCAA is an acronym for the "Defense Contract Audit Agency".  This agency provides audit services for the DoD and other federal agencies. The organization acts as an overseer to ensure governmental and military contracts are kept on budget in the accounting process, in order to not waste tax dollars.

The DCAA initiates audit services on contracts with a significant influence on contract pricing, services and overall negotiations with prospective contractors. The agency does not determine contract awards. That said, its recommendations to government contract awarders are used by officials who complete the negotiations for thousands of aerospace and defense contracts.

What is the Difference Between DCAA and DCMA?

The DCAA is responsible for auditing and providing additional monitoring of contractor accounting.

The Defense Contract Management Agency (DCMA) also has a broad range of responsibilities. That includes overseeing operations for contractors on behalf of the DoD and other organizations. This agency manages product delivery and supply and service acquisition on the government's behalf.

For the purposes of this blog, we will focus on the DCAA.  Learn more about DCMA vs DCAA with this comparison of the two agencies.

What Comes Before a DCAA Audit?

DCAA compliance generally consists of an audit and accommodating the recommendations from the agency in order to comply with federal rules and regulations.

Before you can prepare for a full DCAA audit, your A&D business must pass pre-award surveys. The DCAA requirements covered in these surveys are not nearly as in-depth as full audits. However, they will check to see if your company has the following:

  • Enough financial capital and the means to take on a government contract.

  • A robust accounting system that will be able to keep track of different itemized costs associated with a government contract.

An ERP system with procedures that your employees buy into will set you up for success when bidding for a government contract from the U.S. military.

Cre8tive Technology and Design provides professional integration of Epicor Kinetic, a powerful ERP that can be custom configured for aerospace and defense companies to achieve compliance progression. We are the preferred Epicor partner for A&D ERP implementation.

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What is a DCAA Audit?

The DCAA audit process is complex with various types of audit categories. We have a dedicated resource available to address the process, from forward pricing to incurred cost, and other audits. This DCAA compliance manual helps our clients achieve positive results.

What Costs Need to be Organized for DCAA Compliance?

Because a DCAA audit is essentially a robust check on everything financial within your company, the more specific your accounting is, the better.

Broadly, DCAA auditors are looking for different types of costs, like direct costs, allowable costs, unallowable costs, and cost pools. Having a DCAA–compliant accounting system is critical. If you employ hourly employees, it is crucial that exact hours and wages are documented in a dependable timekeeping system.

You can see the full list of costs on the government's Federal Acquisition Regulation website.

How Can an ERP System Help with DCAA Audits?

Simply  having an ERP system will not automatically guarantee DCAA compliance. However, a strong and dependable ERP system will go a long way in helping you achieve it.

Utilizing an ERP system will help keep your business organized and optimized. Our team of experts can design and implement ERP solutions, like those from Epicor Kinetic, that will help you achieve DCAA compliance. In turn, that creates better conditions to bid for, win, and complete government contracts.

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Have unique aerospace and defense DCAA compliance needs? Once you reach out, one of our knowledgeable representatives will help you get started with a custom compliance plan.

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