DCAA has released guidance on closing out low risk time-and-material and labor hour contracts.  Following a successful pilot project, DCAA is instructing its field audit offices to identify additional contractor sites that are suitable to participate.  The guidance allows “low risk” contractors with several T&M/L&H contracts of $1 million or less to close out their contracts “prior to completion of the incurred cost audit and without an audit of the final voucher.”  The guidance includes criteria to be considered “low risk” such as (a) contractor has adequate accounting, billing, and labor accounting systems (b) labor floor checks have been performed with no significant exceptions (c) no significant exceptions have been taken on final vouchers and (d) the impact on T&M contracts of questioned G&A costs in prior audits was not significant.  

Participant contractors will be required to submit an abbreviated final voucher to their ACO on all completed contracts within 30 days where the abbreviated voucher is the SF1034 which shows the summary information along with summary information normally contained on the SF 1035 (e.g. total hours, total labor dollars, material, ODCs, G&A, total accumulated amount, total amount due).  Auditors will coordinate with the ACO to periodically spot-check abbreviated vouchers to verify accuracy of claimed amounts.  The field offices should also continually monitor information that would have a bearing on contractor’s low risk-high risk status.  The guidance has identified 20 contractor locations and encourages auditors to identify additional contractors (05-PPD-037).     

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