Complying with FAR and CAS Regulations: Everything you Need to Know
Navigating FAR and CAS Compliance: How Deltek Costpoint Supports Government
Contractors
Introduction
Federal Acquisition Regulation (FAR) and Cost Accounting Standards (CAS) compliance are
non-negotiable pillars for established government contractors. These complex frameworks govern
everything from how costs are categorized and reported to how rates are structured and time is recorded.
The regulatory rigor can be daunting, even for seasoned firms. But as any veteran in the GovCon space
knows, compliance isn’t just about checking boxes. It’s about staying contract-eligible, audit-ready, and
operationally sound.
For contractors managing multi-million-dollar programs with countless deliverables, manual
systems and patchwork solutions won’t cut it. That’s where Deltek Costpoint comes in. Designed
specifically for government contracting, Costpoint provides an integrated, audit-ready environment that
simplifies the most challenging aspects of FAR and CAS compliance, without sacrificing operational
agility.
This paper explores how Costpoint supports four critical areas of compliance: cost allowability,
timekeeping, indirect rate structure, and audit readiness.
1. Cost Allowability: Drawing the Line Clearly
The distinction between allowable and unallowable costs under FAR Part 31 can be surprisingly
nuanced. Alcohol, lobbying, and entertainment expenses are obvious no-gos, but what about mixed-use
software or shared marketing services? Missteps here aren’t just bookkeeping issues, they can lead to cost
disallowances, repayment demands, or worse, contract terminations.
Deltek Costpoint mitigates these risks by allowing users to pre-classify costs and tag them
appropriately from the outset. Its project-based chart of accounts and robust cost pools help ensure that
expenses are categorized and billed correctly. Unallowable costs are automatically segregated, making
compliance easier and reducing the likelihood of human error.
What’s more, Costpoint provides configurable rules and validation checkpoints that catch
potential compliance violations before costs are even posted. This means less cleanup at the end of the
month—and fewer headaches come audit time.
2. Timekeeping: The First Line of Defense
If there’s one area where auditors love to dig, it’s timekeeping. Why? Because labor costs make
up a large chunk of most government contracts. One misallocated hour can trigger questions about
internal controls, labor charging practices, and whether your system is compliant with FAR and the
DCAA’s timekeeping guidance.
Deltek Costpoint’s integrated time and labor module supports secure, DCAA-compliant
timekeeping with features that go beyond simple clock-in/clock-out mechanics. Employees enter their
hours in real-time, with audit trails that log every edit, who made it, when, and why. Supervisors can
approve time in workflow, ensuring accountability at every level.
The system also includes automated reminders and validations to prevent late submissions and
flag out-of-policy entries. With mobile access and role-based permissions, Costpoint’s timekeeping
capabilities support distributed teams while maintaining the control and traceability auditors expect.
3. Indirect Rate Structure: Precision Where It Matters Most
Establishing and maintaining an appropriate indirect rate structure is part math, part strategy, and
part regulatory finesse. Whether you’re using a single-tier structure or more complex multi-pool
arrangements, the way you allocate overhead, G&A, and fringe benefits must be logical, documented,
and, above all, consistent.
Costpoint allows for intricate indirect rate structures that can be tailored to your business model,
without sacrificing compliance. The system calculates provisional, actual, and target rates automatically,
and applies them across projects based on defined logic. Need to run “what-if” scenarios or model rate
changes mid-year? Costpoint supports that, too, letting you forecast the impact on profitability and
compliance before making any commitments.
More importantly, the system produces the required disclosure statements and supporting
documentation needed for CAS compliance. Whether you’re submitting to the DCAA or preparing for an
incurred cost submission, Costpoint gives you the data, and the audit trail, you need.
4. Audit Readiness: Not Just a Moment, but a Mindset
The best time to prepare for an audit is yesterday. But with Costpoint, being audit-ready becomes
less of a scramble and more of a default state. Its centralized database ensures that data is consistent
across modules, whether it’s financials, procurement, or HR, eliminating the silos that so often trip up
contractors during audits.
Every transaction in Costpoint is traceable, from the initial entry to the final report. Built-in
reports like trial balances, billing summaries, and incurred cost submissions are export-ready and
formatted in ways auditors recognize. The system also maintains historical versions of key documents,
making it easier to show how policies have evolved, or stayed the same, over time.
And because Costpoint is designed with government audits in mind, its architecture supports
internal controls and audit trails that align with the expectations of agencies like the DCAA, DCMA, and
GAO.
Concluding Thoughts
In the government contracting world, compliance isn’t just about avoiding trouble, it’s about
positioning yourself for growth. FAR and CAS regulations are rigorous by design, but with the right tools,
they don’t have to be a barrier to scale.
Deltek Costpoint brings together the controls, transparency, and automation needed to not only
meet compliance requirements but to thrive within them. Whether you’re navigating the gray areas of cost
allowability, establishing defendable indirect rates, or preparing for your next audit, Costpoint provides
the infrastructure to stay ahead, secure, informed, and always ready.
When compliance is baked into your system rather than bolted on, it ceases to be a burden and
becomes a strategic asset. That’s the Deltek difference
