Sep 23, 2025
Material Management and Accounting System Compliance: A Strategic Imperative for Government
Contractors
In the space of government contracting, particularly in the aerospace and defense (A&D) industry,
compliance is inseparable from competitiveness. Contractors are not only required to deliver on cost,
schedule, and performance; they must also operate under a web of oversight designed to ensure efficiency
and accountability. One of the most critical oversight mechanisms is the Material Management and
Accounting System (MMAS), governed by the Defense Contract Management Agency (DCMA).
Failure to comply with MMAS standards can result in payment withholds, audit findings, or even lead to
the termination of a contract. However, contractors who excel at MMAS compliance stand out as reliable
partners in the eyes of the federal government and other potential clients.
What is MMAS Compliance?
MMAS is a set of criteria DCMA auditors use to determine whether a contractor’s material management
and accounting practices are sufficient. These criteria ensure contractors buy the right materials, in the
right quantities, charge them to the right projects, and provide full traceability along the way.
At its core, MMAS compliance is about discipline:
● Validating needs: Contractors must align purchases with approved bills of material (BOMs).
● Avoiding excess: Overbuying or holding unnecessary inventory is discouraged.
● Maintaining accuracy: Costs must be charged to the correct contract and reconciled regularly.
● Enabling traceability: Records must clearly show the flow of materials from procurement to
usage.
The goal is straightforward: to ensure accountability for government funds and prevent fraud, waste, and
abuse.
The Challenges of MMAS
Contractors often struggle with MMAS because it touches so many parts of the business, i.e.,
procurement, production, inventory, and accounting. When these processes are managed in silos or spread
across multiple systems, it becomes difficult to demonstrate compliance. Some of the most common
challenges include:
● Inconsistent data between procurement and accounting systems
● Difficulty reconciling material costs across multiple contracts
● Limited visibility into inventory levels and usage
● Manual processes that create errors or gaps in audit trails
These pain points not only increase the risk of noncompliance but also drain valuable time and resources
that could otherwise be spent on program execution.
Deltek Costpoint: Embedding Compliance into Operations
This is where Deltek Costpoint shines as a facilitator of material management. Costpoint was
purpose-built for government contractors, and its integrated design makes it uniquely suited to address the
full scope of MMAS requirements. Rather than layering compliance checks on top of operations,
Costpoint embeds them into daily workflows.
Here are a few ways Costpoint supports MMAS compliance:
● End-to-End Integration: Costpoint connects procurement, inventory, production, and accounting
in one system, ensuring materials are tracked from requisition to final use. This eliminates data
silos and supports accurate cost allocation.
● Automated Controls and Validations: Built-in rules prevent overbuying, validate requirements
against BOMs, and flag discrepancies early. These proactive controls reduce the chance of
compliance issues during audits.
● Audit-Ready Visibility: Costpoint provides detailed reporting and audit trails, so contractors can
quickly demonstrate how materials were planned, acquired, and consumed. This transparency
reduces the stress of DCMA reviews.
● Scalability for Growth: Whether managing a handful of contracts or a complex global supply
chain, Costpoint scales with the business. Its modular architecture supports evolving compliance
needs without disrupting operations.
● Link to Broader Compliance: Costpoint’s MMAS functionality doesn’t exist in a vacuum; it ties
into broader FAR and CAS compliance requirements, ensuring contractors maintain a holistic
compliance posture.
Beyond Compliance: Building Competitive Advantage
While MMAS compliance is required, contractors can use it as a differentiator. A strong MMAS
demonstrates control, efficiency, and reliability, i.e., all qualities the federal government and other
contractors value in a partner. By adopting Deltek Costpoint, contractors not only mitigate audit risk; they
enhance operational efficiency and strengthen their reputation in the marketplace.
In today’s environment of supply chain disruption and increased oversight, having a reputation that
reflects efficiency and risk mitigation is valued now more than ever. Contractors who can show DCMA
auditors that their systems are robust and well-integrated are also proving to program managers and
contracting officers that they are low-risk, dependable suppliers.
Conclusion
MMAS compliance may sound like a regulatory burden, but with the right systems, it becomes a natural
extension of good business practice. Deltek Costpoint allows government contractors to integrate
compliance into everyday operations, reducing risk while improving efficiency and visibility.
For contractors in aerospace and defense, this isn’t just about checking a regulatory box. It’s about
building the kind of disciplined and transparent business that facilitates efficient operation that wins trust
and wins contracts.
Jul 29, 2025
Congratulations, Jarrod!
Please join us in congratulating Jarrod Brown, CSCP, CPIM on his well‑deserved promotion to Director of Materials and Manufacturing here at PDS Consulting Solutions, LLC!
Jarrod has consistently demonstrated exceptional leadership, deep industry expertise, and a commitment to driving innovation in the materials and manufacturing space. His work has been instrumental in helping our clients streamline operations, strengthen compliance, and achieve lasting results.
We’re excited to see the impact Jarrod will continue to make in this new role as he guides our team and partners toward even greater success.
Congratulations, Jarrod—your dedication and vision inspire us all!
Jul 29, 2025
REGISTER TODAY!
We’re excited to announce that Jarrod Brown, CSCP, CPIM of PDS Consulting Solutions, LLC will be leading an upcoming webinar you won’t want to miss:
📌 Topic: Leveraging Costpoint Advanced Manufacturing for Your Future Growth
📅 Date: Tuesday, September 16th
🕐 Time: 1:00 PM (ET)
Jarrod will share insights on how Deltek Costpoint Advanced Manufacturing can empower your organization to streamline operations, ensure compliance, and set the stage for long‑term growth in today’s competitive landscape.
REGISTER HERE: https://lp.constantcontactpages.com/sl/UYGn5Iu/REGISTERJBSEPT2025
Jul 17, 2025
Understanding Government Contract Types in the Aerospace & Defense
Industry: A Guide
Introduction
The Aerospace & Defense sector operates in one of the most demanding contracting
environments in the world. Working with the U.S. government (especially agencies like the
Department of Defense) requires not only technical expertise and operational excellence but also
a firm grasp of the types of contracts used in federal procurement. Each contract type comes with
its own risk profile, regulatory requirements, pricing mechanisms, and accounting obligations.
This guide provides a practical overview of the major contract types used in A&D government
contracting, along with insights into how a purpose-built ERP like Deltek Costpoint supports
effective management and maintains compliance for each.
Before addressing each of the contract types, it is important to first understand the risk inherent to all government contracts.
Risk in Government Contracting:
In the context of government contracts, risk refers to the potential for loss, non-performance, cost
overruns, legal exposure, or reputational harm that may arise during the execution of a contract
with a government agency (in this case, specifically the DD). These risks can stem from
financial, operational, legal, or compliance-related factors, and they vary depending on the
contract type, scope, terms, and agency involved. These types will be expanded upon later.
Types of Risk in Government Contracts
● Financial Risk
○ Unanticipated costs not reimbursed under fixed-price contracts
○ Inaccurate pricing or bid assumptions
○ Cash flow constraints due to delayed payments
● Performance Risk
○ Failure to deliver on scope, schedule, or quality requirements
Technical or logistical challenges in meeting contract specifications
○ Inability to hire or retain skilled labor
● Compliance Risk
○ Noncompliance with federal regulations such as FAR, DFARS, CAS, or ITAR
○ Inadequate timekeeping or cost allocation practices
○ Data security or CMMC-related violations
● Regulatory and Audit Risk
○ Adverse findings from DCAA, DCMA, or IG audits
○ Disallowed costs or questioned expenses
○ Termination for default or cause
● Reputational Risk
○ Negative outcomes that affect eligibility for future contracts
○ Public scrutiny or whistleblower actions
○ Loss of trust from agency customers or prime contractors
● Legal Risk
○ Contract disputes or claims under the Contract Disputes Act
○ False Claims Act exposure
○ Breach of contract or subcontractor litigation
Risk Allocation by Contract Type
● Fixed-Price Contracts shift most of the risk to the contractor. You must deliver the
project at the agreed-upon price, even if costs rise
● Cost-Reimbursement Contracts shift more risk to the government but increase
compliance burdens and audit exposure.
● Time-and-Materials Contracts involve shared risk but may require careful tracking and
justification of hours and materials.
1. Fixed-Price Contracts
Definition: In a fixed-price contract, the government agrees to pay a set amount for a defined
product or service, regardless of the contractor’s actual costs.
Subtypes:
● Firm-Fixed-Price (FFP): Most common. Contractor bears full risk.
● Fixed-Price Incentive (FPI): Offers incentives for cost savings or performance
milestones.
● Fixed-Price with Economic Price Adjustment (FPEPA): Used when costs are likely to
fluctuate over time (e.g., fuel, metals).
Implications for A&D: FFP contracts are favored for mature technologies with predictable costs. However, in A&D,
where complexity and long project timelines are common, cost overruns can erode margins
quickly.
How Deltek Costpoint Helps:
● Tracks actual vs. target costs in real-time
● Alerts users to budget deviations early in the project lifecycle
● Supports detailed work breakdown structures (WBS) for high-cost visibility and control
2. Cost-Reimbursement Contracts
Definition: The government reimburses the contractor for allowable costs and typically pays a
fee (fixed or incentive-based) for performance.
Subtypes:
● Cost-Plus-Fixed-Fee (CPFF)
● Cost-Plus-Incentive-Fee (CPIF)
● Cost-Plus-Award-Fee (CPAF)
Implications for A&D:
These contracts are used for high-risk R&D, prototyping, or mission-critical systems where final
cost is uncertain. They shift more risk to the government and demand strong cost control and
audit readiness from the contractor.
How Deltek Costpoint Helps:
● Enforces allowability and allocability rules under FAR and CAS
● Enables rigorous timekeeping and labor cost attribution
● Provides automated indirect cost rate calculations and reallocation
3. Time-and-Materials (T&M) Contracts
Definition: Contractors are paid for labor (at pre-negotiated hourly rates) and materials used,
with limited government oversight of efficiency.
Implications for A&D:
T&M contracts are suitable for short-term technical services, testing, or maintenance. They
carry moderate risk and require vigilant tracking of labor and materials to avoid disputes.
How Deltek Costpoint Helps:
● Facilitates accurate time tracking and labor category classification
● Provides audit trails and labor cost validation
● Supports billing based on approved labor and material rates.
4. Indefinite Delivery Contracts (IDCs)
Definition: Includes IDIQ (Indefinite Delivery/Indefinite Quantity), task order, and delivery
order contracts. These contracts provide flexibility for the government to issue work as needed.
Implications for A&D:
IDCs are commonly used for systems integration, logistics, and sustainment. They require
modular contract management and adaptable resource planning.
How Deltek Costpoint Helps:
● Manages funding and ceiling amounts across multiple task orders
● Tracks costs and performance metrics at both contract and task order levels
● Enables compliance with funding and obligation limits
Managing Risk and Compliance Across Contract Types
Each contract type carries distinct obligations related to billing, reporting, cost accounting, and
compliance. In the A&D space, compliance isn’t just a best practice, it’s essential for contract
retention and audit survival.
Key Regulatory Considerations:
● FAR (Federal Acquisition Regulation)
● CAS (Cost Accounting Standards)
● DFARS clauses (especially for DoD contracts)
● DCAA/GAO audit readiness
● ITAR/EAR compliance for export-controlled technology
Deltek Costpoint’s Edge:
● CAS-compliant cost allocation engine
● DCAA-ready audit documentation and reporting
● Project accounting integrated with procurement, inventory, and manufacturing
● Native support for WAWF (Wide Area Workflow) and other federal invoicing system
● Project accounting integrated with procurement, inventory, and manufacturing
● Native support for WAWF (Wide Area Workflow) and other federal invoicing systems
Concluding Thoughts
Understanding government contract types is fundamental for success in the A&D contracting
world. The ability to execute these contracts efficiently (and stay compliant while doing so) can
be the difference between growing your federal portfolio and losing ground to competitors.
Deltek Costpoint empowers contractors with the tools needed to manage every aspect of contract
performance, whether it be from budgeting and cost control or billing and audit prep, on a single,
integrated platform built for the unique needs of contractors in the A&D industry.
Jul 1, 2025
In Case You Missed It!
Jarrod Brown, CSCP, CPIM, Deltek Costpoint Coffee Break 2025!
Topic: So Much Information in One Place, Costpoint Material Inquiry Screens
Click Here to Listen:
https://lnkd.in/eUui3zt8
May 15, 2025
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
