GovCon FAQ #6: How can I prepare to bid on an RFP that mentions an “approved accounting system”?

Updated on: February 26, 2021


If you or your company is in the process of proposing on or considering proposing on a government contract, there’s a good chance that you’ve seen this term before. It can be referred to in the form of the DCAA approved accounting system review, an SF1408, or a pre-award audit. But what does this mean to you?  

The technical name for an “approved accounting system” is the DCAA Form SF1408 “Pre-award accounting system survey,” and it’s designed to ensure that your company has the controls, policies, and procedures in place for your company to support and administer a cost reimbursement type contract. This includes but is not limited to a written accounting policy, a process for segregating costs, review and approval processes, and the ability to track and apply indirect cost to intermediate or final cost objectives in line with some of the policies and procedures that you have in place.  

This is not performed over the history of the company, but an examination of the company at a point in time to ensure that your accounting system and design of policies can support a cost reimbursement type contract and therefore support some contract performance. If your system is already established, the turnaround time for an SF1408 is relatively quick and can be performed by either the DCAA or a Certified Public Accounting firm. Because of the time constraints that the DCAA faces as a result of several years of auditing and providing other services, a Certified Public Accounting firm tends to be the common route. 

This process not only empowers you to obtain a contract with the federal government, it also prepares you to utilize this throughout the performance of the contract. Having a system in place prior to being on a contract leads to the greatest possible success. If you do not have an accounting system that is prepared for this process, it’s important to reach out to somebody who can help. We have teams in place that can help prepare you for or perform the SF1408 accounting system survey. If you have any questions about the importance of this based on your future goals, please do reach out to us and we can discuss your options in line with your short and longterm plans. 

Sometimes people look at some these regulations we talked about, some of the barriers to entry, as an administrative challenge. We know that there is limited competition with some of the SBA set-aside programs. We also know that there’s a lot of compliance and regulation that needs to be met in order to do business with the federal government. A lot of times people just want to get these completed and move on so that they can bid on the contract, but we really look at it as an investment in making sure that you’ve set yourself up for success from the beginning.  

We spend time going through the details with our clients and look at their policies and procedures. We try to be cognizant of places where the DCAA has found issues in the past. We try to really help companies prepare for what can really be an amazing journey when done properly. There is a very strategic way that you can bid on a contract quickly, without having to go through a lot of policies and procedures first, we can help you get there.   

Next Up: GovCon FAQ #7: What is an unallowable cost and how does that impact operations?


Our experienced professionals are well versed in accounting, consulting, tax, and audit and can help you navigate the complexities of government contracting to support, optimize, and accelerate your success. Get in touch with our team→

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