What’s Included in SF1408?
SF1408 is simply a review to determine if your system is set up and operating in accordance with the criteria on page 2 of SF1408. This is far more focused on your accounting system itself than the strategic pricing involved in winning the contract.
SF1408 Requirements for Government Contractors Include Information Such As:
- General business information: The form will ask you to provide basic contact information and to verify that your accounting system aligns with generally accepted accounting principles (GAAP).
- Accounting system evaluation: The main section of SF1408 is to determine if your accounting system meets a long list of criteria (we’ll get into that in just a second) that proves your system is capable of handling the complexities associated with a government contract.
- Supporting documentation: Required documents will differ depending on your contract, but in general, you will need to provide information such as financial statements and your policy and procedure manuals.
Note that this SF1408 version is different than an Accounting System Audit! An audit of your accounting system is much more in-depth and includes tests of internal controls (e.g., segregation of duties, etc.). Know what you need when you read through the RFP. If you have a question, ask the COR during the Q&A time – the difference between the SF1408 and an accounting audit is huge!
The Evaluation Checklist
To be compliant with SF1408, you need to document what your system does — think the segregation of indirect vs. direct costs and unallowables (our favorite). How are costs captured and classified? How and where do you charge your time?
Here’s a checklist with a few of the system capabilities you’ll need to address on SF1408:
- Is your accounting system in full operation?
- Does your system allow you to segregate indirect and direct costs?
- Can you logically and consistently allocate indirect costs to intermediate and final cost objectives?
- Can your system accumulate direct costs under a general ledger?
- Can you identify direct costs by contract?
- Do you have a timekeeping system that can identify employee labor by intermediate or final cost objectives?
- Can you exclude costs charged to the government that are not allowable?
- Can you separate preproduction costs from production costs?
How BOOST Can Help Your Business Maintain DCAA Compliance
At BOOST, GovCon is our specialty. Our seasoned professionals have extensive experience working solely with GovCons, so you can trust us to know the industry in and out. We understand the accounting compliance requirements you face and can help you navigate the ever-evolving regulations to enjoy greater peace of mind. We’ll help you complete SF1408 and prepare for audits so that you can go on to win more contracts.
Connect With an Expert Today
If you plan on priming this year on a Cost-Type contract or are awarded a cost-type subcontract (looking at you, DOD peeps!), make sure you are prepared for the SF1408 with documented policies and a compliant accounting system. BOOST is here to support you through every stage of the Pre-Award audit so that you can win more contracts.
Do you still have questions or want to discuss this as it pertains to your business specifically? Contact us to speak with one of our GovCon accounting experts.
