A professional service firm such as an engineering design firm or construction engineering and inspection firm can be thought of as a rocket ship. Looking at the business as a rocket ship, it gets easier to remember and share the elements of developing a successful business.
Like a rocket ship a business has two basic parts, the engines that power the ship, and the guidance systems to set course. Our rock ship has five engines and four guidance systems.
Thinking back to when you first started your firm, if you did not go through the checklist you see below formally, you did so informally.
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.”
A 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.
Engineering firms must provide annual reimbursement rate audit reports to the Florida Department of Transportation to bid on contracts larger than $500,000.
FDOT Reimbursement Rate Audit Guidelines contain specific Departmental requirements in addition to the general guidelines contained in the American Association of State Highway and Transportation Officials (AASHTO) Uniform Audit and Accounting Guide.
Technically known as a firm's "indirect cost rate," the more familiarly known "overhead rate" is the percentage of general expenses that consultants can bill to contracting government agencies. More specifically, it is the ratio of allowable indirect costs to total allocable direct labor costs.
Subscribe now and receive regular updates!