Accounting System Verification Required For Many New Government Opportunities

Solicitations for many new Government contracts now include the requirement that the offeror have an accounting system that has been evaluated as adequate for determining costs applicable to the proposed contract. For the most part, this evaluation must be documented on a Pre-Award Survey of Prospective Contract Accounting System (SF 1408) that is submitted submitted with the offeror’s proposal.

The clause below comes from the NIH Information Technology Acquisition and Assessment Center (NITAAC) Chief Information Officer-Solutions and Partners III (CIO-SP3) solicitation. It is typical of those found in many Government solicitations.

Verification of an Adequate Accounting System
Because of the need for Contractors to respond to Cost Reimbursement task orders, to be eligible for award under the GWAC, Offerors must have verification from the Defense Contract Audit Agency (DCAA), the Defense Contract Management Agency (DCMA), any federal civilian audit agency, or a third-party Certified Public Accounting (CPA) firm of an accounting system that has been audited and determined adequate for determining costs applicable to this contract in accordance with FAR 16.3013(a)(1). In the event the verification is from a third-party CPA, the verification letter shall be on the letter head of the third-party CPA firm, and certified by a certified public accountant. For those Offerors that submit a proposal in the form of a FAR 9.601(1) CTA, see paragraph L.3.1.6, each member of the CTA must show evidence that it has verification of an adequate accounting system. Failure to do so will result in an unacceptable rating (see M.2). 

As such, the Offeror must provide in its proposal a contact name and contact information (i.e., phone number, address, email address) of its representative at its cognizant DCAA, DCMA, federal civilian audit agency, or third-party accounting firm and submit, if available, a copy of the Pre-Award Survey of Prospective Contracting Accounting System (SF 1408), provisional billing rates, and/or forward pricing rate agreements.

What Does CohnReznick Think?
The verification of accounting systems will continue to be a requirement for contract eligibility for Government projects. Many contractors, directly and on behalf of civilian agencies, have asked CohnReznick to conduct accounting system adequacy verifications. We expect the pace of these verifications to increase this year – and in the future.

If your company is a prospective offeror, CohnReznick can assist you in completing the SF 1408 quickly and cost-efficiently.

Please contact CohnReznick partners Kristen Soles ( or 703.847.4411) or Lynne Gummo ( or 703.286.1710) for more information.

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