In the realm of government contracting, mastering the Incurred Cost Proposal (ICP) process is crucial. This comprehensive guide addresses frequently asked questions about ICPs, providing valuable insights for new, current, and potential government contractors to help you navigate this critical aspect with confidence.
What Is an Incurred Cost Proposal (ICP)?
An ICP is a detailed report that government contractors on Cost Reimbursable contracts need to submit annually. It outlines the actual indirect costs incurred during the fulfillment of a contract or multiple contracts within a specific period.
Who Is Required to Submit an ICP?
All contractors with a cost-reimbursable contract, including cost-type, time-and-materials, or labor-hour contracts, must submit an ICP. Typically, this requirement applies if your annual incurred costs exceed $750,000. However, certain contracts might have different thresholds, so it’s vital to refer to your specific contract’s terms for precise guidelines.
ICP Submission Deadline
The submission deadline for an ICP is six months after the end of your fiscal year. For businesses with a fiscal year ending on December 31st, the due date is June 30th of the following year. If your fiscal year ends on a different date, adjust the submission deadline accordingly. Always consult your contract for any specific deadline variations.
Consequences of Late or Inaccurate ICP Submissions
Timely and accurate submission of an ICP is crucial. Late submissions can result in reduced cost recovery, while inaccuracies may lead to disputes and possibly extensive audits. Ensuring compliance and accuracy in your ICP is key to avoiding these complications.
Essential Elements of a Completed ICP
A comprehensive ICP should include:
- Labor costs (wages, benefits, payroll taxes)
- Material costs (cost of raw materials, parts, etc.)
- Overhead expenses (rent, utilities, insurance)
- General and administrative costs (accounting, legal services)
Preparing an ICP
Accurate and detailed record-keeping throughout the contract period is vital for ICP preparation. This includes maintaining clear distinctions between direct and indirect costs and implementing robust accounting systems and procedures.
Will My ICP Be Audited?
Yes, the Defense Contract Audit Agency (DCAA) conducts compliance audits on submitted ICPs. These audits verify adherence to cost principles and requirements as outlined by the Federal Acquisition Regulation (FAR).
Finding ICP Preparation Resources
Resources for ICP preparation can be found on the DCAA website, in the Contract Audit Manual (CAM), and within the FAR. These sources offer comprehensive guidance on ICP requirements and best practices.
WrkPlan: Your Guide in Government Contracting
At WrkPlan, we understand the intricacies of ICP preparation and submission. Our tools and expertise are designed to help you navigate this process efficiently, ensuring compliance and maximizing your potential in government contracting.
Stay connected with WrkPlan for more insights and support in your government contracting journey.