Letters, numbers, acronyms, and more. It’s like a GovCon fairytale minus the lions, tigers, and bears. Oh my!
Today we’re discussing SF1408. What is it and why is it something you should be familiar with?
A 1408 assessment is the Pre-Award Accounting System Survey (SF1408). The Accounting System Survey is sometimes referred to as a “pre-award audit” and it is necessary for the award of any Cost Type contract, meaning you must successfully complete the SF1408 before a government contract is awarded.
A few points to note:
• This comes BEFORE the contract award.
Imagine losing a bid because you didn’t have your act together in your financials! If you can’t get your SF1408 in order before the contract is started, how can they trust your credibility in managed GovCon accounting?
• This is not an audit.
They (DCAA) focus on your accounting system’s ability to be compliant if you were to receive the award. SF1408 is simply a review to determine if your system is set up and operating in accordance with the criteria on page 2 of Standard Form 1408. This is far more focused on your accounting system itself than the strategic pricing involved in winning the contract.
• This is where policies and procedures rule (Here’s a tip: an accounting system is not just the software being utilized).
To be compliant with SF1408, DCAA is looking for you 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?
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.
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!
Do you still have questions or want to discuss this as it pertains to your business specifically? Contact us here.