Many think they won’t qualify for “large company” regulatory requirements.

Are these objections keeping you from moving forward now?

“I don’t qualify, I do hard bid fixed price jobs!”
Fixed price contracts receiving progress payments may qualify, as do cost reimbursable, incentive, and time and materials contracts.

“My contracts are too small to be covered!”
If your company is CAS covered (Fed Contracts over $50M) or Modified CAS Covered (Fed Negotiated Contracts of only $7.5M) the Business Systems rule applies. If your company Bills from a schedule of values, and / or has any of the six Business Systems clauses, you most likely qualify!

“My internal control system is already strong!”
The internal control system must adhere to “special requirements of government contracting.” Auditors have been known to cite deficiencies for even minor mistakes. For example, an Accounting System was deemed inadequate because the accounting manual had too many spelling and grammatical errors!

“I only do Government Commercial or Government Construction Contracts!”
The Government specifically states “The Government is at risk when a contractor's business systems contain significant deficiencies, regardless of contract type.” Therefore, Government Commercial and Government Construction contracts are subject to the rule.

“We only do state government jobs, not Federal!”
Many state contracts receive Federal funding and incorporate Federal FAR and CAS “flow-down” provisions.

“I won’t get audited!”
The Defense Contract Audit Agency (DCAA) has committed to prioritizing business system audits and has taken steps to address staffing challenges.

“I won’t do anything until the regulation is finalized!”
The interim rule applies to solicitations issued after May 18th and all applicable contracts awarded after August 16th! Establishing a compliance system can take months, and new qualifying contracts will require compliance within a very short window. Therefore, penalties may apply to companies willing to procrastinate and roll the dice.