Webinar: Managing Cost Type Contracts
March 28, 2023
Managing cost type contracts is a sophisticated undertaking. The contractor must understand what a “cost” is, have an adequate accounting system, establish both direct and indirect budgets (and actively manage them), manage on an accrual basis, and with actual (not billing) rates.
Failure to comply with these requirements can have serious ramifications, including incurring a loss, a poor cash flow, inaccurate cost reporting, an inadequate accounting system, and possible false claims violations. An understanding of your obligations is essential to mitigating your risks, maximizing your cost recovery, and maintaining your bottom line — essentially the difference between recovering your costs and making a profit or losing your shirt.
- What an “adequate” accounting system must include
- Which costs can — and can’t — be reimbursed
- How direct costs are reimbursed
- How indirect costs are reimbursed
- How to handle invoicing on cost-type contracts
- The “Paid-to Cost” rule
- The limitation of Cost-and-Funds clauses