DCAA Compliance
DCAA compliant accountingfor government contractors.
Audit-ready books for federal contracts. Job costing, indirect rates, unallowable cost segregation, ICE submissions — built to pass the audit on the first walkthrough. Since 2006.
By Samantha White, CPA · Last updated June 16, 2026
II — What DCAA looks at
Five audits, one accounting system.
| Audit | What DCAA examines | When it happens |
|---|---|---|
| Pre-award accounting system survey (SF 1408) | Whether your system can segregate direct, indirect, and unallowable costs | Before a cost-reimbursable contract is awarded |
| Incurred cost audit | Your annual ICE submission and supporting records | Annually, after contract close |
| Forward pricing audit | Proposed rates and pool composition | Before contract negotiation |
| Floor check | Timekeeping practices — observation in your workplace | Random, during contract performance |
| CAS compliance | Cost Accounting Standards adherence for large contracts | For contracts subject to CAS |
III — How it's different
Standard books won't pass.
| Feature | Standard Bookkeeping | DCAA-Compliant |
|---|---|---|
| Cost tracking | By account only | By job, contract, and task |
| Indirect rates | Not required | Calculated and documented |
| Unallowable costs | Often mixed in | Segregated in separate accounts |
| Timekeeping | Optional, retroactive | Daily, by project, signed |
| Audit readiness | Year-end scramble | Continuous |
| ICE submission | Not produced | Produced annually |
| Documentation trail | Minimal | Source-to-statement traceability |
IV — The process
How WBBM gets you DCAA-ready.
Diagnose
We assess your current accounting system against DCAA standards. We identify what segregates correctly, what doesn’t, and what the audit would flag today.
Design
We build the DCAA-compliant chart of accounts, indirect rate pools, timekeeping system, and documentation workflow specific to your contract type.
Document
We prepare the SF 1408 pre-award survey responses, set up the ICE submission framework, and walk through the system the way DCAA will. You’re ready before they call.
V — What's included
- DCAA-compliant chart of accounts setup
- Job cost tracking by contract
- Indirect rate pool design (fringe, overhead, G&A)
- Unallowable cost identification and segregation
- Daily timekeeping system (DCAA-acceptable software)
- Incurred Cost Electronic (ICE) submission preparation
- Pre-award accounting system survey readiness (SF 1408)
- Audit walkthrough preparation
- Subcontractor flow-down compliance
- Multi-year contract cost reconciliation
VI — Who it's for
New federal awardees
Needing a pre-award accounting system survey (SF 1408). We get you compliant before bid.
Established contractors
Heading into a CAS or floor-check audit. We prepare the books and walk the auditor through.
Subcontractors
Required to flow down DCAA standards from their prime. We handle the compliance work.
Built to pass the audit on the first walkthrough.
VIII — Frequently asked
What does DCAA actually audit?
The Defense Contract Audit Agency audits contractor accounting systems, incurred cost submissions, forward pricing proposals, floor checks (timekeeping), and CAS compliance. The most common audit small contractors face is the pre-award accounting system survey (SF 1408).
Do I need a DCAA-compliant system before bidding?
For most cost-reimbursable federal contracts, yes — you need to demonstrate an adequate accounting system before award. WBBM sets up that system and prepares the SF 1408 survey responses.
What software does DCAA accept?
DCAA doesn't certify software, but it requires that the system produce certain reports and segregate certain costs. WBBM commonly implements QuickBooks Online or Desktop with a DCAA-compliant chart of accounts, plus a separate timekeeping tool. We've also worked in Deltek, Unanet, and Procas.
How long does DCAA-compliant setup take?
A clean setup from scratch is typically 4-8 weeks. Existing systems being brought into compliance take 6-12 weeks because of historical cost reclassification.
Do you handle the audit itself?
We prepare you for the audit and sit with you through the walkthrough. The audit is conducted by DCAA — we make sure the system, documentation, and team are ready when they arrive.
Federal contract on the horizon? Get the books ready first.