What FDOT Consultants Need to Know About Job Cost Accounting Systems

Professional Consultants seeking to provide services to the Florida Department of Transportation must be certified as “qualified” annually in accordance with Chapter 14-75 of the Florida Administrative Code.

The First & Primary Requirement

Regardless of whether the “Request for Qualification Package for Professional Consultants” is the initial submission or an annual renewal, the package must include evidence that you (the Consultant) maintains an accounting system adequate to separate and accumulate direct and indirect costs and to support billings to the FDOT Department and other clients.

The capability to identify and separately report direct and indirect costs is the first and primary Departmental requirement for your accounting systems.

When you (the Consultant) has the expectation of billing for direct labor by the hour, a job cost accounting system is required in order to “support billings to the FDOT Department.”

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10 Traits of a FAR Compliant Accounting System

10-Traits-of-a-FAR-Compliant-Accounting-SystemA FAR compliant accounting system is a common prerequisite for becoming a pre-qualified consultant for a state transportation department. 

Your accounting system must, among other functions, properly segregate direct and indirect costs in accordance with the Cost Accounting Standards (CAS) of Federal Acquisition Regulation (FAR) Part 31 for you to work government contracts.

If you do not have a FAR compliant accounting system, you could fail to get or keep pre-qualified consultant status and perhaps miss opportunities to bid on transportation contracts all together.

A FAR compliant accounting system does the following, according to the the American Association of State Highway and Transportation Officials' AASHTO Uniform Audit and Accounting Guide and the Defense Contract Audit Agency's DCAA Pamphlet 7641.90. AASHTO cites DCAAP 7641.90 as a guide for transportation departments and consultants.

  1. Segregates direct costs and indirect costs
  2. Accumulates direct costs by contract
  3. Allocates indirect costs to intermediate and final cost objectives (contracts) based on “a logical and consistent method”
  4. Reconciles the job-cost ledger and other books of account with the general ledger, and is controlled by the general ledger
  5. Tracks employee time by work activity
  6. Charges direct and indirect labor costs to the appropriate contracts
  7. Produces interim reports of charges to contracts, at least monthly
  8. Excludes unallowable costs
  9. Identifies costs by line item and units, if required by contract
  10. Segregates pre-production costs and production costs

The DCAA offers additional guidance in a presentation on accounting system requirements for government contractors, as well as an accounting system requirements checklist for government contractors.

Please contact us here  or call (904) 731-9222 if you have additional questions, or if you would like to see if you have a FAR compliant accounting system.

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