Contractors that use a fiscal year ending 12/31 submit their annual cost submissions in June of the following year. For 2010 incurred cost submissions (ICS) submitted in June 2011, many contractors may receive affirmative claims from the Government seeking to disallow some or all of those incurred costs, because the Government has a 6-year statute of limitations to bring such claims (i.e., June 2017). Due to DCAA’s audit backlog, COs may receive Audit Reports right around the SOL deadline, and issue Final Decisions in order to avoid missing that deadline. Contractors that do receive Final Decisions disallowing costs should be aware of the 90 day limit to appeal the Final Decision, whether they intend to negotiate or litigate.
