What to Expect During a Pre-Award Accounting System Review
If you’re bidding on a cost-reimbursement or flexibly priced government contract, you may be subject to a Pre-Award Accounting System Review—a critical step in the procurement process. Conducted by the Defense Contract Audit Agency (DCAA) or a contracting officer, this review determines whether your accounting system meets federal requirements before the contract is awarded.
The Pre-Award Accounting System Review evaluates your internal controls, timekeeping processes, and ability to properly track and allocate costs. Key focus areas include:
- Segregation of direct and indirect costs
- Tracking of unallowable costs
- Job cost accounting capabilities
- Labor distribution and timekeeping accuracy
- Consistent treatment of costs
- Adequate written policies and procedures
To pass the review, you must demonstrate that your accounting system is capable of supporting government contract compliance—particularly under FAR Part 31.
Failure to meet these standards can delay contract award or result in lost business. That’s why preparing in advance is essential. Implementing the right accounting structure and documentation can make the difference between a successful review and a costly setback.
At N5 Specialized Accounting Services & Support, we help government contractors prepare for and pass Pre-Award Accounting System Reviews with confidence. From system setup to mock audits, we ensure you’re audit-ready and contract-capable.
