Understanding Overhead in Government Contracts Management

Home , Overhead (business)

A special course for non-accountants Understanding involved in the dollar-business of government contract Overhead in bidding, proposals, performance and claims. Government Contracts

EARN CREDITS January 27-28, 2009 • Washington, DC April 21-22, 2009 • New Orleans, LA CLE 11* / CPE 13** June 9-10, 2009 • Las Vegas, NV Presented by Federal Publications Seminars www.fedpubseminars.com Understanding Overhead in Course Faculty Government Contracts Louis Rosen is a certified Public Accountant “make it work for you” and attorney, Government Contract Services, for Ernst & Young, LLP. Mr. Rosen formerly served You’ve got to understand something before you can work with it. . . as Associate Director of the Cost Accounting before you can make it work for you. . . before you can succeed. That Standards Board and is a past faculty member of idea is what this special course is all about: the University of Maryland’s College of Business Understanding Overhead in Government Contracts Management. Mr. Rosen is active in numerous professional organizations, including the American Developed by Federal Publications Seminars, the program is styled (a) for contractors’ non-accountant representatives who are involved in Institute of Certified Public Accountants, the the dollar-business of bidding on Government contracts, submitting Association of Government Accountants and the proposals, planning and monitoring performance, prosecuting claims; National Contract Management Association. Mr. and (b) for Government non-accountant representatives charged with Rosen has received his Bachelor of Science (magna reviewing or contesting the appropriateness of contractors’ costs. cum laude), Masters and Doctorate in Business It’s based on the premise that non-accountants generally do not feel Administration from University of Maryland and a comfortable with the concept of overhead—although they do realize Juris Doctor from Maryland’s School of Law. that to a large-degree (often exclusively) overhead treatment can make or break a venture. James M. Weitzel, Jr. is Senior Counsel, So, as detailed in the balance of this brochure, the distinguished Northrop Grumman Government Solutions Course Faculty, supplemented by the exclusive Course Manual, will and was formerly in private practice in the explain: the nature of overhead vs. direct costs; varieties of overhead; Washington, DC law offices of Fried, Frank, Harris, what can/should be included in overhead; composition of overhead Shriver & Jacobson. Mr. Weitzel concentrates pools; allocation/liquidation of overhead; changes in overhead systems; on Government contract matter. A former Government requirements and Government audits, maximum recovery contract administrator for the Defense Contract techniques; and more. They will, in short, do all they can to assure that Administration Services and contract negotiator you understand overhead so that you can more readily control it. . . for the Naval Air and Naval Sea Systems justify it. . . recover it. Commands, he lectures and has written widely on Government contract cost and cost accounting We cannot promise that even after spending two days of intensive issues. Mr. Weitzel received his Bachelor of Arts study with us you’ll think of overhead as something simple or from Pennsylvania State University; a Master of consistently clear to work with. But we are certain that, at the least, Arts degree from Duquesne University and a Juris this special course will substantially increase your ability to make overhead work for you. We invite you to join us. Doctor degree from Catholic University, where he served as an editor of the Law Review. Government Contract Costs, Pricing and Accounting Report by Karen L. Manos

This important newsletter features the latest news of cost and pricing developments, as well as in-depth analysis of relevant cases, statutes, and regulations. Each Report: • Assesses the impact of relevant cost regulations or statutes • Evaluates procedures for avoiding and resolving disputes In House Programs • Reviews the rules governing contract pricing, financing, administration, audit, changes, and terminations Bring any seminar or course directly to your staff through the Federal Publications’ In- House Presentations Program.

Newsletter, 6 issues annually Unparalleled Benefits: $450.00 per Year • Cost Effective • Convenience • Special Focus • Impact • Confidentiality

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DIRECT VS. INDIRECT e. Common Problems CHARGING DIRECT COSTS OVERHEAD POOLS 1. Definitions 1. MANY NAMES, SAME 5. TYPES OF COSTS 15. HOMOGENEOUS COSTS 2. Criteria MEANING a. Usual a. The Concept 3. Allocation techniques a. “Overhead” b. Unusual b. CASB Criteria 4. Allocation problems b. “Indirect Cost” c. Special Cases c. Examples 5. Advance agreements c. “Indirect Expense” 6. APPLICATION OF OVERHEAD 1. Material-related costs 6. Ceilings d. “Burden” a. When Appropriate 2. Inspection e. “Pool” b. When Not 3. Off-site work 2. THE REGULATIONS 7. COST OBJECTIVES 4. Machining SUPPORT & SERVICE CENTERS a. Sources a. Charging to Objectives 5. Assembly 18. FUNCTIONS 1. FAR b. Direct Identification 6. Quality control a. ADPE Operations 2. CAS c. Use of Surrogates 7. Engineering b. Occupancy Costs b. Definitions 8. Product support c. Central Services c. Concepts 8. DIRECT COSTING METHODS 16. EFFECT OF CONTRACT MIX d. Other 1. Allowability a. Actual Costs a. Number of Contracts 19. TREATMENT OF COSTS 2. Allocability b. Average Rates b. Types of Contracts a. Pooling 3. Materiality c. Standard Costs c. Govt. vs. Commercial b. Direct Cost 4. Accounting principles d. Blanket Rates Contracts c. Special Facility Allocation d. Compliance d. Nature of Work d. Pooled Costs Allocation 3. CHOICES IN CHARGING 1. Manufacturing 1. Resource consumption a. Flexibility vs. . . INDIRECT COSTS 2. Service 2. Output b. Limitations 9. BENEFICIAL RELATIONSHIP 3. Off-site 3. Surrogates c. Contract Clauses a. What It Means 4. R&D d. Selected Cost Treatment b. Proving It 5. Other 1. Labor c. Impact on Cost Objectives 17. ESTABLISHING POOLS CHANGES IN ACCOUNTING 2. Materials d. Impact on Overhead Pools a. Designating the Pools 20. WHAT IS A CHANGE 3. Supplies e. CASB Criteria 1. Single overhead pool a. CASB Criteria 4. Purchased items 10. CAUSAL RELATIONSHIP 2. G&A expense b. Govt. Imposed 5. Tooling a. Definition & Proof 3. Manufacturing c. Contractor Initiated 6. Equipment rental b. Compared to “Beneficial” 4. Engineering d. Timing Problems 7. Travel c. Impact on Cost Objectives 5. Home office e. Materiality Issues 8. Depreciation d. Impact on Overhead Pools 6. Selling 21. WHEN TO CHANGE 9. Leases e. CASB Criteria 7. IR&D/B&P a. New Products 10. Fringe benefits 11. CHOOSING THE RIGHT BASE 8. Material handling b. Organizational Changes 11. Contract administration a. What is a Base 9. Others c. Contract Mix Changes 12. Service centers 1. Resources consumed b. Too Many Pools d. Competitive Pressures 13. Selling expense 2. Activity managed 1. Effect on cost 22. EFFECT ON CONTRACT 14. R&D/B&P b. Importance of Choice forecasting PRICE 15. Others c. Impact on Dollars 2. Impact on pricing a. Increases 4. FINANCIAL MANAGEMENT d. Fragmenting the Base 3. Volatile overhead rates b. Decreases a. Maximizing Cost Recovery 1. When & why 4. Administration c. Pitfalls b. Ease vs. Accuracy 2. Fragmenting problems 5. Base & pool interaction c. Cost Control e. Changing the Base c. Too Few Pools d. Forecasting Costs 1. Reasons 1. Inaccurate allocations CURRENT ISSUES 1. Pooling 2. The right time 2. Lack of CAS 2. Fixed costs compliance 23. THE WINDS OF CHANGE 3. Special problems 3. Variable costs 12. MEASURES OF RESOURCES 3. Improper costing 4. Semi-variable costs 4. Management errors 24. DCAA TRENDS CONSUMED a. Direction e. Traceability of Costs a. Output d. How Many Pools f. Contract Mix 1. Criteria b. Authority b. Space Occupied c. Influence g. Cosmetics c. Services Provided 2. Financial management 1. Calculating the dollars d. Use of Surrogates issues 2. Lowering the “rate” 13.MEASURES OF ACTIVITY 3. Overhead cost analyses h. Pricing Strategy MANAGED 4. Structuring the pools i. Program planning a. Labor Cost 5. Functional tests j. Optimum Competitive 1. Average 6. Competitive structure Position 2. Pre-established labor k. Employee Incentives rate l. Govt. Audit b. Labor Hours 1. Govt. rights c. Machine Hours 2. Scope of audit d. Units of Production 3. What to expect e. Material Cost 4. Accounting changes f. Other 5. Coping with audits 14. INTERCOMPANY m. The Shifting Overhead Rate TRANSFERS a. Full Absorption Accounting b. Special Treatment c. Exceptions

Copyright 2009 Federal Publications Seminars, a Thomson Reuters Business. All Rights Reserved. Detach and mail to the exact address stated below. Understanding Overhead DATES AND LOCATIONS • 2009 January 27-28, 2009 in Government Contracts Marvin/Cafritz Conference Center • The George Washington University, 800 21st Street, NW • Washington, DC 20052 • 202/994-7470 Federal Publications Seminars http://gwired.gwu.edu/marvincenter/cafritz 195 Broadway, 9th Floor April 21-22, 2009 Royal Sonesta Hotel New Orleans New York, NY 10007 300 Bourbon Street, New Orleans, LA 70130 800-766-3782 or register online at: www.fedpubseminars.com www.royalsonesta-neworleans.com o REGISTRATION APPLICATION June 9-10, 2009 Enclosed is my check for the $995 registration fee plus applicable sales/use Flamingo Las Vegas, 3555 Las Vegas Blvd. South, Las Vegas, NV 89109 taxes. (Please make check payable to West.) 1-888-308-8899 • 702-733-3111 • www.flamingolasvegas.com

o January 27-28, 2009 DAILY SCHEDULE Washington, DC • Marvin/Cafritz Conference Center Registration: 8:45 on the First Day, (code 40785663) Meetings: 9:00 – 12:00 and 1:00 – 4:00

o April 21-22, 2009 New Orleans, LA • Royal Sonesta New Orleans To Register: (code 40785664) • The Registration fee of $995 includes the price of a course manual which is valued at $270 plus applicable taxes. o June 9-10, 2009 Applicable taxes include sales, use, gross receipts, excise, Las Vegas, NV • Flamingo Las Vegas value added tax (VAT) or equivalent, ad valorem and other (code 40785665) taxes. • Register online at www.fedpubseminars.com I understand that (a) an acknowledgement of this registration will be sent to me, and (b) this registration may not be cancelled later than two weeks • Call 888-494-3696 before the session begins (but I may name a substitute registrant at any • Fax the completed registration application information to: time). 202-772-8298 or mail to Federal Publications Seminars, 195 Broadway, 9th Floor, New York, NY 10007

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