answered: Instructions Big Money – Federal Division CAPC Instructions Background – Big Money, Inc.

Instructions

Big Money – Federal Division
CAPC Instructions
Background
– Big Money, Inc. (Big Money) is a contractor who provides pharmaceutical services to the Federal Government
– Previously, Baker Tilly has been engaged by Big Money to complete incurred cost proposals
– Big Money is making two unilateral cost accounting practice changes and have engaged us to help prepare a GDM
– The CAPCs will go into effect at the beginning of FY18 (January 1, 2018)
– One CAPC will be modeled during class and the other CAPC will be modeled as homework
– Baker Tilly plans to use Big Money’s FY17 ICP in order to perform the GDM analysis
Follow the Four Step Cost Impact Process – Change #2
Step 1a: Identify Change – G&A Base Change from TCI to Value-Added
– Historically, Big Money has utilized a Total Cost Input (TCI) G&A base due to lack of significant subcontractor and material costs
– Due to significant business growth over the past few years, Big Money has been subcontracting out more of their contract work to other companies
– This has led to a significant rise in subcontractor cost and the associated administrative time required to manage those subcontracts. Therefore, Big Money Leadership would like to segregate their subcontract and material costs from their G&A costs.
– This requires Big Money to create a separate Material Handling pool / rate
– And requires Big Money to change their G&A base from TCI to Value-Added
– Big Money directed us to use the assumption that the Materials & Supplies account in the G&A pool is solely related to Subcontractors
– This is a Cost Accounting Practice Change (CAPC) due to a change in the allocation of G&A costs from TCI to Value-Added
Step 1b: Perform Indirect Rate Modeling
Overall: make the necessary adjustments to Schedules A, B, C, D (as applicable) in order to process the CAPC. See individual steps below:
– Identify the subcontractor & material costs in the G&A pool (Sch. B) (account 800-009)
– Remove the subcontractor & material costs from the G&A pool
– Add the subcontractor & material costs to the MH pool (Sch. C-2)
– Create the MH base (MH base should include direct subcontractor & material expenses). This includes: a) remove direct subcontractor and direct material expenses from the G&A base (on the Sch. E) and b) add direct subcontractor and direct material expenses to the MH base (on the Sch. E)
– Update the G&A base by adding the MH pool to the G&A base. In this specific case study, the entire MH base is direct subs/materials, so the entire MH Pool would end up in a value-add G&A base. In other situations, the MH base may include B&P/IR&D subs/materials, for which only a portion of the MH pool would end up in the value-add G&A base.
– Update the Sch. A to include the MH pool, base and rate
– Review the Sch. A to ensure the rate differences logically make sense
Step 2: Determine Impact Population
– Review Schedule H to determine the affected contract population
Step 3: Calculate Impact
– Calculate the difference in cost between utilizing the “current state” indirect rates and the “future state” indirect rates by contract on Schedule H (Total Costs Updated minus Total Costs Original)
*** Don’t forget to apply the MH rate ***
– Calculate the number of days each contract is active in FY17 (assume 365 days in a year)
*** Utilize the following formula: DAYS(end date, start date)+1
– Calculate the FY17 impact per day
– Calculate the number of days remaining on each contract from the CAPC implementation date to the contract’s end date (assume 365 days in a year)
*** Reminder: CAPC will go into effect at the beginning of FY18 (January 1, 2018)
*** Utilize the following formula: DAYS(end date, start date)+1
– Calculate the total impact
– Utilize “cost impact math” to determine the increase/decrease in cost to the Government (Big Money will be treating T&M contracts as FFP for cost impact calculations)
– Summarize results by contract type and agency on the Impact Summary tab

Impact Summary

Change #2
Total Impact – Updated
Cost Type – 0
Commercial
DOD
DOE
Time & Materials – 0
Commercial
DOD
DOE
Fixed Price – 0
Commercial
DOD
DOE
Net Impact to Gov’t – 0

Grading Rubric

Grading Rubric – Case Study #2
Task / Description Points Assigned Points Received Notes
Submit case study on time 10
Calculate the correct G&A pool 2.5
Calculate the correct MH pool 2.5
Calculate the correct G&A base 5
Calculate the correct MH base 5
Update the Sch. A to include the MH pool, base and rate 2.5
Apply the MH rate on the Sch. H 2.5
Calculate “FY17 Total Cost Comparison” on the Sch. H 10
Calculate “FY17 Days Active” on the Sch. H 10
Calculate “FY17 Impact per Day” on the Sch. H 10
Calculate “ETC Days” on the Sch. H 10
Calculate “Total Impact” on the Sch. H 10
Calculate “Total Impact – Updated” on the Sch. H 10
Calculate the correct end answer on the Impact Summary tab 10
Total 100 0

ICS Template —>

Trial Balance

Big Money – Federal Segment
Trial Balance
For the Period Ending 12/31/17
Account # Account Type Account Name U/A Labor/Non-Labor Balance
500 – 001 Direct Direct Labor Allowable Labor 32,600,000
500 – 002 Direct Direct Materials Allowable Non-Labor 11,000,000
500 – 003 Direct Direct ODC Allowable Non-Labor 8,155,880
500 – 004 Direct Direct Travel Allowable Non-Labor 282,500
500 – 005 Direct Direct Subcontractors Allowable Non-Labor 11,657,840
600 – 001 Fringe Paid Leave (Paid Time Off) Allowable Non-Labor 2,200,000
600 – 002 Fringe Payroll Taxes Allowable Non-Labor 1,200,000
600 – 003 Fringe 401K Allowable Non-Labor 750,000
600 – 004 Fringe Health Insurance Allowable Non-Labor 2,500,000
600 – 005 Fringe Life Insurance Allowable Non-Labor 750,000
600 – 006 Fringe Accidental Death & Dismembermant Insurance Allowable Non-Labor 720,000
600 – 007 Fringe Long Term Disability Allowable Non-Labor 900,000
600 – 008 Fringe Short Term Disability Allowable Non-Labor 600,000
600 – 009 Fringe Relocation Costs Allowable Non-Labor 150,000
600 – 010 Fringe Other Fringe Expenses Allowable Non-Labor 1,500,000
650 – 001 Facilities Office Equipment & Furniture Rental Allowable Non-Labor 75,000
650 – 002 Facilities Maintenance Allowable Non-Labor 500,000
650 – 003 Facilities Leases Allowable Non-Labor 75,000
650 – 004 Facilities Utilities Allowable Non-Labor 5,000
650 – 005 Facilities Property Management Fees Allowable Non-Labor 10,000
650 – 006 Facilities Property Taxes Allowable Non-Labor 160,000
650 – 007 Facilities Security Allowable Non-Labor 140,000
700 – 001 Federal OH Overhead Labor Allowable Labor 9,500,000
700 – 002 Federal OH Depreciation & Amortization Allowable Non-Labor 1,000,000
700 – 003 Federal OH Material and Supplies Allowable Non-Labor 750,000
700 – 004 Federal OH Shipping Allowable Non-Labor 3,000
700 – 005 Federal OH Travel Allowable Non-Labor 1,200,000
700 – 006 Federal OH Travel in Excess of Per Diem Unallowable Non-Labor 50,000
700 – 007 Federal OH Entertainment Unallowable Non-Labor 20,000
700 – 008 Federal OH Conferences Allowable Non-Labor 8,000
700 – 009 Federal OH Severance Pay (for Direct Employees) Allowable Non-Labor 20,000
700 – 010 Federal OH Bonus Allowable Non-Labor 250,000
700 – 011 Federal OH Consultant Fees Allowable Non-Labor 500,000
800 – 001 G&A G&A Indirect Labor Allowable Labor 1,500,000
800 – 002 G&A Accounting Fees Allowable Non-Labor 250,000
800 – 003 G&A Depreciation & Amortization Allowable Non-Labor 300,000
800 – 004 G&A Directors Fees & Expenses Allowable Non-Labor 250,000
800 – 005 G&A Recruiting Allowable Non-Labor 350,000
800 – 006 G&A Office Equipment & Furniture Rental Allowable Non-Labor 50,000
800 – 007 G&A Severance Pay (for Indirect Employees) Allowable Non-Labor 15,000
800 – 008 G&A Legal Fees – General Allowable Non-Labor 200,000
800 – 009 G&A Material and Supplies Allowable Non-Labor 150,000
800 – 010 G&A Bonus Allowable Non-Labor 150,000
800 – 011 G&A Stockholders Expenses Allowable Non-Labor 200,000
800 – 012 G&A Travel Allowable Non-Labor 300,000
800 – 013 G&A Travel in Excess of Per Diem Unallowable Non-Labor 35,000
800 – 014 G&A Entertainment Unallowable Non-Labor 15,000
850 – 001 B&P B&P Labor Allowable Labor 300,000
850 – 002 B&P B&P Travel Allowable Non-Labor 150,000
875 – 001 IR&D IR&D Labor Allowable Labor 100,000
875 – 002 IR&D IR&D Travel Allowable Non-Labor 50,000

Index

Big Money – Federal Segment
Fiscal Year Ended 12/31/2017
Index
Schedule A Summary of Claimed Indirect Expense Rates
Schedule B General and Administrative Expenses
Schedule C Overhead Expenses
Schedule D-1 Fringe Expenses
Schedule D-2 Facility Expenses
Schedule D-3 Corporate Home Office Expense (Human Resourced and Corporate Residual)
Schedule E Claimed Allocation Bases
Schedule F Not Applicable
Schedule G Reconciliation of Books of Accounts and Claimed Direct Costs
Schedule H Schedule of Direct Costs by Contract/Subcontract and Indirect Expenses Applied at Claimed Rates
Schedule H-1 Government Participation in Indirect Cost Pools
Schedule I Schedule of Cumulative Direct and Indirect Costs Claimed and Billed
Schedule J Subcontract Information
Schedule K Summary of Hours and Amounts on T&M/Labor Hour Contracts
Schedule L Reconciliation of Total Payroll to Total Payroll Distributed
Schedule M Listing of Decisions/Agreements/Approvals and Description of Accounting/Organizational Changes
Schedule N Indirect Cost Certification
Schedule O Schedule of Ready to Be Closed Contracts For Those Contracts Which Work Effort Was Completed During FY 2017
Supplemental Schedule B Executive Compensation Information

Sch. A

Big Money – Federal Segment
Schedule A
Summary of Claimed Indirect Expense Rates
Fiscal Year Ended 12/31/2017
Description Updated Rates Original Rates Change Reference
Fringe Expense Rate
Expense Pool 11,267,795 11,267,795 – 0 Sch. D-1
Allocation Base 44,000,000 44,000,000 – 0 Sch. E & D-1
Fringe Expense Rate 25.61% 25.61% 0.00%
Overhead Expense Rate
Expense Pool 16,210,114 16,210,114 – 0 Sch. C-1
Allocation Base 41,450,846 41,450,846 – 0 Sch. E
Overhead Expense Rate 39.11% 39.11% 0.00%
Material & Handling Expense Rate
Expense Pool – 0 – 0 Sch. C-2
Allocation Base – 0 – 0 Sch. E
MH Expense Rate 0.00% 0.00% 0.00%
General and Administrative Rate
Expense Pool 8,084,458 8,084,458 – 0 Sch. B
Allocation Base 88,282,715 88,282,715 – 0 Sch. E
G&A Expense Rate 9.16% 9.16% 0.00%

Sch. B

Big Money – Federal Segment
Schedule B
General & Administrative Expenses
Fiscal Year Ended 12/31/2017
Account # Account Name Trial Balance Adjustments Unallowable CAPC Adj. Ending Balance Reference Notes
800 – 001 G&A Indirect Labor 1,500,000 – 0 – 0 1,500,000
800 – 002 Accounting Fees 250,000 – 0 – 0 250,000
800 – 003 Depreciation & Amortization 300,000 – 0 – 0 300,000
800 – 004 Directors Fees & Expenses 250,000 – 0 – 0 250,000
800 – 005 Recruiting 350,000 – 0 – 0 350,000
800 – 006 Office Equipment & Furniture Rental 50,000 – 0 – 0 50,000
800 – 007 Severance Pay (for Indirect Employees) 15,000 – 0 – 0 15,000
800 – 008 Legal Fees – General 200,000 – 0 – 0 200,000
800 – 009 Material and Supplies 150,000 – 0 – 0 150,000
800 – 010 Bonus 150,000 – 0 (111,250) 38,750 Supp. Sch. B Unallowable Compensation
800 – 011 Stockholders Expenses 200,000 – 0 – 0 200,000
800 – 012 Travel 300,000 – 0 (24,000) 276,000 Unallowable Sample (8%)
800 – 013 Travel in Excess of Per Diem 35,000 – 0 (35,000) – 0 Wholly Unallowable Account
800 – 014 Entertainment 15,000 – 0 (15,000) – 0 Wholly Unallowable Account
850 – 001 B&P Labor 300,000 – 0 – 0 300,000
850 – 002 B&P Travel 150,000 – 0 – 0 150,000
875 – 001 IR&D Labor 100,000 – 0 – 0 100,000
875 – 002 IR&D Travel 50,000 – 0 – 0 50,000
Subtotal G&A Pool 4,365,000 – 0 (185,250) – 0 4,179,750
Intermediate Allocations:
Allocation Allocated Fringe on G&A Indirect Labor – 0 384,129 – 0 384,129 Sch. D-1
Allocation Allocated Fringe on B&P Labor – 0 76,826 – 0 76,826 Sch. D-1
Allocation Allocated Fringe on IR&D Labor – 0 25,609 – 0 25,609 Sch. D-1
Allocation Allocated Overhead on B&P Labor – 0 147,365 – 0 147,365 Sch. E
Allocation Allocated Overhead on IR&D Labor – 0 49,122 – 0 49,122
Allocation Allocated Facilities – 0 266,455 – 0 266,455 Sch. D-2
Allocation Allocated Home Office Human Resources – 0 571,875 – 0 571,875 Sch. D-3
Allocation Allocated Home Office Residual Expense – 0 2,383,328 – 0 2,383,328 Sch. D-3
Total G&A Pool 4,365,000 3,904,708 (185,250) – 0 8,084,458

Sch. C-1

Big Money – Federal Segment
Schedule C-1
Overhead Expenses
Fiscal Year Ended 12/31/2017
Account # Account Name Trial Balance Adjustments Unallowable CAPC Adj. Ending Balance Reference Notes
700 – 001 Overhead Labor 9,500,000 – 0 – 0 9,500,000
700 – 002 Depreciation & Amortization 1,000,000 – 0 – 0 1,000,000
700 – 003 Material and Supplies 750,000 – 0 – 0 750,000
700 – 004 Shipping 3,000 – 0 – 0 3,000
700 – 005 Travel 1,200,000 – 0 (96,000) 1,104,000 Unallowable Sample (8%)
700 – 006 Travel in Excess of Per Diem 50,000 – 0 (50,000) – 0 Wholly Unallowable Account
700 – 007 Entertainment 20,000 – 0 (20,000) – 0 Wholly Unallowable Account
700 – 008 Conferences 8,000 – 0 (400) 7,600 Unallowable Sample (5%)
700 – 009 Severance Pay (for Direct Employees) 20,000 – 0 – 0 20,000
700 – 010 Bonus 250,000 – 0 (40,850) 209,150 Supp. Sch. B Unallowable Compensation
700 – 011 Consultant Fees 500,000 – 0 (15,000) 485,000 Unallowable Sample (3%)
Subtotal Overhead Pool 13,301,000 – 0 (222,250) – 0 13,078,750
Intermediate Allocations:
Allocation Allocated Fringe – 0 2,432,819 – 0 2,432,819 Sch. D-1
Allocation Allocated Facilities – 0 698,545 – 0 698,545 Sch. D-2
Total Overhead Pool 13,301,000 3,131,364 (222,250) – 0 16,210,114

Sch. C-2

Big Money – Federal Segment
Schedule C-2
Material & Handling Expenses
Fiscal Year Ended 12/31/2017
Account # Account Name Trial Balance Adjustments Unallowable CAPC Adj. Ending Balance Reference Notes
CAPC Adjustment – 0 – 0 – 0
Subtotal M&H Pool – 0 – 0 – 0 – 0 – 0
Intermediate Allocations:
Allocation Allocated Fringe – 0 Sch. D-1
Total M&H Pool – 0 – 0 – 0 – 0 – 0

Sch. D-1

Big Money – Federal Segment
Schedule D-1
Fringe Expense Pool & Base
Fiscal Year Ended 12/31/2017
Fringe Expense Pool:
Account # Account Name Trial Balance Adjustments Unallowable CAPC Adj. Ending Balance Reference Notes
600 – 001 Paid Leave (Paid Time Off) 2,200,000 – 0 – 0 2,200,000
600 – 002 Payroll Taxes 1,200,000 – 0 (2,205) 1,197,795 Supp. Sch. B Unallowable Medicare
600 – 003 401K 750,000 – 0 – 0 750,000
600 – 004 Health Insurance 2,500,000 – 0 – 0 2,500,000
600 – 005 Life Insurance 750,000 – 0 – 0 750,000
600 – 006 Accidental Death & Dismembermant Insurance 720,000 – 0 – 0 720,000
600 – 007 Long Term Disability 900,000 – 0 – 0 900,000
600 – 008 Short Term Disability 600,000 – 0 – 0 600,000
600 – 009 Relocation Costs 150,000 – 0 – 0 150,000
600 – 010 Other Fringe Expenses 1,500,000 – 0 – 0 1,500,000
CAPC Adjustment – 0
Total Fringe Pool 11,267,795
Fringe Allocation Base (Total Labor):
Account # Account Name Trial Balance Adjustments Unallowable CAPC Adj. Ending Balance
500 – 001 Direct Labor 32,600,000 – 0 – 0 – 0 32,600,000
700 – 001 Overhead Labor 9,500,000 – 0 – 0 – 0 9,500,000
800 – 001 G&A Indirect Labor 1,500,000 – 0 – 0 – 0 1,500,000
850 – 001 B&P Labor 300,000 – 0 – 0 – 0 300,000
875 – 001 IR&D Labor 100,000 – 0 – 0 – 0 100,000
CAPC Adjustment – 0
Total Fringe Base 44,000,000
Fringe Rate 25.61%
Fringe Allocation Split
Direct Labor 8,348,411 Sch. E
Overhead Labor 2,432,819 Sch. C
G&A Indirect Labor 384,129 Sch. B
B&P Labor 76,826 Sch. B
IR&D Labor 25,609 Sch. B
CAPC Adjustment Sch. B
Total Allocation 11,267,795 Sch. A

Sch. D-2

Big Money – Federal Segment
Schedule D-2
Facilities Expense Pool & Base
Fiscal Year Ended 12/31/2017
Facilities Expense Pool:
Account # Account Name Trial Balance Adjustments Unallowable CAPC Adj. Ending Balance Reference Notes
650 – 001 Office Equipment & Furniture Rental 75,000 – 0 – 0 75,000
650 – 002 Maintenance 500,000 – 0 – 0 500,000
650 – 003 Leases 75,000 – 0 – 0 75,000
650 – 004 Utilities 5,000 – 0 – 0 5,000
650 – 005 Property Management Fees 10,000 – 0 – 0 10,000
650 – 006 Property Taxes 160,000 – 0 – 0 160,000
650 – 007 Security 140,000 – 0 – 0 140,000
Total Facilities Pool 965,000
Facilities Allocation Base (Square Footage):
Department Square Footage Allocation % Allocated Amount
Overhead 24,250 72% 698,545 Sch. C
G&A 9,250 28% 266,455 Sch. B
Total Facilities Base 33,500

Sch. D-3

Big Money – Federal Segment
Schedule D-3
Home Office Expense Allocations
Fiscal Year Ended 12/31/2017
Home Office Human Resources Allocation: Residual Home Office Expense Allocation:
Home Office Human Resources Pool 1,200,000 Home Office Residual Expense Pool 4,500,000
Allocation Base (Headcount): Allocation Base (Three Factor Formula):
Segment Headcount Allocation % Allocated Amount Segment Revenue Assets NBV Payroll (Labor) Avg %
Federal Segment Headcount 122 48% 571,875 Sch. B Federal Segment 110,000,000 56% 1,566,720 49% 44,000,000 54% 53%
Commercial Logistics Segment Headcount 75 29% 351,563 Commercial Logistics Segment 47,142,857 24% 843,619 26% 21,753,846 27% 26%
Research Services Segment Headcount 59 23% 276,563 Research Services Segment 40,123,127 20% 801,617 25% 15,205,200 19% 21%
Total Headcount 256 1,200,000 Total 197,265,984 100% 3,211,956 100% 80,959,046 100% 100%
Residual Allocation Split:
Federal Segment 53% 2,383,328 Sch. B
Commercial Logistics Segment 26% 1,155,499
Research Services Segment 21% 961,174
Total 4,500,000

Sch. E

Big Money – Federal Segment
Schedule E
Claimed Allocation Bases
Fiscal Year Ended 12/31/2017
Fringe Allocation Base:
Account # Account Name Trial Balance Adjustments CAPC Adj. Ending Balance Reference Notes
500 – 001 Direct Labor 32,600,000 – 0 32,600,000 Sch. G
700 – 001 Overhead Labor 9,500,000 – 0 9,500,000 Sch. C
800 – 001 G&A Indirect Labor 1,500,000 – 0 1,500,000 Sch. B
850 – 001 B&P Labor 300,000 – 0 300,000 Sch. G
875 – 001 IR&D Labor 100,000 – 0 100,000 Sch. G
Total Fringe Base 44,000,000 Sch. A
Base Description: Total Payroll dollars of direct and indirect employees (Total Labor).
Overhead Allocation Base
Account # Account Name Trial Balance Adjustments CAPC Adj. Ending Balance
500 – 001 Direct Labor 32,600,000 – 0 32,600,000 Sch. G
850 – 001 B&P Labor 300,000 – 0 300,000 Sch. B
875 – 001 IR&D Labor 100,000 – 0 100,000 Sch. B
Allocation Fringe on Direct Labor – 0 8,348,411 8,348,411 Sch. D-1
Allocation Fringe on B&P Labor – 0 76,826 76,826 Sch. D-1
Allocation Fringe on IR&D Labor – 0 25,609 25,609 Sch. D-1
Total Overhead Base 41,450,846 Sch. A
Base Description: Total Direct Labor, IR&D Labor, and B&P labor plus applicable Fringe costs.
Material & Handling Allocation Base
Account # Account Name Trial Balance Adjustments CAPC Adj. Ending Balance
CAPC Adjustment – 0 – 0 – 0 Sch. G
Total M&H Base – 0 Sch. A
Base Description:
G&A Allocation Base
Description Trial Balance Adjustments CAPC Adj. Ending Balance
Direct Labor 32,600,000 – 0 32,600,000 Sch. G
Fringe on Direct Labor 8,348,411 – 0 8,348,411 Sch. D-1
Direct ODC 8,155,880 – 0 8,155,880 Sch. G
Direct Material 11,000,000 – 0 11,000,000 Sch. G
Direct Travel 282,500 – 0 282,500 Sch. G
Direct Subcontractors 11,657,840 – 0 11,657,840 Sch. G
Applied Overhead 16,013,628 – 0 16,013,628 Sch. C
Less: Overhead Allocated to B&P and IR&D – 0 – 0 Sch. B
Unallowable Overhead 222,250 – 0 222,250 Sch. C
Unallowable Fringe 2,205 – 0 2,205 Sch. D-1
CAPC Adjustment – MH – 0
Total G&A Base 88,282,715 Sch. A
Base Description: Total Cost Input.

Sch. G

Big Money – Federal Segment
Schedule G
Reconciliation of Books of Accounts and Claimed Direct Costs
Fiscal Year Ended 12/31/2017
Description Trial Balance Adjustments Claimed Costs Reference Notes
Direct Labor 32,600,000 – 0 32,600,000 Sch. H & E
Direct Travel 282,500 – 0 282,500 Sch. H & E
Direct Materials 11,000,000 – 0 11,000,000 Sch. H & E
Direct Subcontractors 11,657,840 – 0 11,657,840 Sch. H & E
Direct ODC 8,155,880 – 0 8,155,880 Sch. H & E
B&P Labor 300,000 – 0 300,000 Sch. H & E
B&P Travel 150,000 – 0 150,000 Sch. H & E
IR&D Labor 100,000 – 0 100,000 Sch. H & E
IR&D Travel 50,000 – 0 50,000 Sch. H & E
Total Direct Costs 64,296,220 – 0 64,296,220
Note: Claimed Direct Costs include B&P and IR&D

Sch. H

Big Money – Federal Segment Fiscal Year Start Fiscal Year End CAPC Implementation Date
Schedule H 1/1/17 12/31/17 1/1/18
Contract Direct Costs by Contract/Subcontract & Indirect Expenses Applied at Claimed Rates
Fiscal Year Ended 12/31/2017
Direct Costs
Fringe Benefit Overhead M&H Plus Claimed G&A @
Other Direct Total Direct @ Claimed Rate @ Claimed Rate @ Claimed Rate Overhead and Claimed Rate Cost Impact Math
Contract Type Contract Number CAS Covered Executive Agency PoP Start PoP End Total Costs – Original Direct Labor Direct Travel Direct Material Subcontracts Costs Costs 25.61% 39.11% Fringe Benefits 9.16% Total Costs – Updated FY17 Total Cost Comparison FY17 Days Active FY17 Impact per Day ETC Days Total Impact Total Impact – Updated
Sch. A Sch. A Sch. A
Cost Type HHSO100201500028C Yes DOD 10/25/16 6/1/18 38,238,954 12,600,000 65,000 4,500,000 5,500,000 2,950,000 25,615,000 3,226,687 6,189,316 – 0 25,031,003 2,292,205 37,323,208
Time & Materials HHSO100201700036B Yes DOD 6/5/17 11/30/18 36,155,674 13,100,000 185,000 4,000,000 2,907,840 3,140,000 23,332,840 3,354,730 6,434,924 – 0 26,214,654 2,400,598 35,523,091
Fixed Price HHSO100201600036A Yes DOE 2/1/16 6/30/17 5,087,560 1,900,000 – 0 250,000 500,000 590,880 3,240,880 486,564 933,310 – 0 3,910,753 358,126 5,018,879
Commerical HHSO100201600038C No N/A 5/10/15 12/1/18 16,639,974 5,000,000 32,500 2,250,000 2,750,000 1,475,000 11,507,500 1,280,431 2,456,078 – 0 10,244,009 938,091 16,182,101
Total Contract Costs 96,122,163 32,600,000 282,500 11,000,000 11,657,840 8,155,880 63,696,220 8,348,411 16,013,628 – 0 65,400,419 5,989,020 94,047,279
B&P 300,000 150,000 – 0 – 0 – 0 450,000 76,826 147,365 – 0
IR&D 100,000 50,000 – 0 – 0 – 0 150,000 25,609 49,122 – 0
Grand Total 96,122,163 33,000,000 482,500 11,000,000 11,657,840 8,155,880 64,296,220 8,450,846 16,210,114 – 0 65,400,419 5,989,020 94,047,279
Sch. J Sch. G

Sch. H-1

Big Money – Federal Segment
Schedule H-1
Government Participation In Indirect Pools
Fiscal Year Ended 12/31/2017
Overhead G&A
Contract Type Base Amount % Base Amount %
Sch. H Sch. H
Cost-Type 15,826,687 45.00% 25,031,003 0.00%
Time & Materials 16,454,730 46.79% 26,214,654 0.00%
Fixed Price 2,386,564 6.79% 3,910,753 0.00%
B&P and IR&D 502,434 1.43% – 0 0.00%
Unallowable Overhead – 0 0.00% – 0 0.00%
Unallowable Fringe – 0 0.00% – 0 0.00%
Total 35,170,415 100.00% – 0 0.00%

Sch. I

Big Money – Federal Segment
Schedule I
Schedule Of Cumulative Direct and Indirect Costs Claimed and Billed
Fiscal Year Ended 12/31/2017
Prior Years Direct and Direct Less Contract Amount of Cumulative Amount Over (Under)
Direct and Indirect Costs Settled Direct & Indirect Costs and Indirect Contract Net Cumulative Value Contract Excluding Fixed Fee Billed vs. Physically
Using Audited Rates Indirect Costs Using Claimed Rates Costs Limitations Costs Settled Excluding Value Billed Through 12/31/2017 Total Costs Complete?
Contract No. 2006 2006 2007 2008 2009 2015 – 2016 2017 Total Rebates/Credits or Claimed Fee Remaining PV # Amount Incurred (Y/N)
Cost Type
HHSO100201500028C $ – 0 $ – 0 $ – 0 $ – 0 $ – 0 $ 30,288,201 $ 37,323,208 $ 67,611,409 $ – 0 $ 67,611,409 $ 75,000,000 $ 7,388,591 22 $ 70,685,750 $ 3,074,341 N
Subtotal – Cost Type $ – 0 $ – 0 $ – 0 $ – 0 $ – 0 $ 30,288,201 $ 37,323,208 $ 67,611,409 $ – 0 $ 67,611,409 $ 75,000,000 $ 7,388,591 $ 70,685,750 $ 3,074,341
Sch. H
Time & Materials
HHSO100201700036B $ – 0 $ 39,474,909 $ 39,474,909 $ – 0 $ 39,474,909 $ 50,000,000 $ 10,525,091 12 $ 37,081,959 $ (2,392,950) N
Subtotal – T&M $ – 0 $ 39,474,909 $ 39,474,909 $ – 0 $ 39,474,909 $ 50,000,000 $ 10,525,091 $ 37,081,959 $ (2,392,950)
Sch. K
Grand Total $ 30,288,201 $ 76,798,117 $ 107,086,318 $ – 0 $ 107,086,318 $ 107,767,709 $ 681,391

Sch. J

Big Money – Federal Segment
Schedule J
Schedule of Subcontract Information
Fiscal Year Ended 12/31/2017
Subcontract Number Prime Contract Number Subcontractor Name & Address Point of Contact Phone Number Subcontract Approval Value FY17 Incurred Costs Subcontract Award Type
Cost Type
BM2017-001 HHSO100201500028C Daily Planet Clark Kent $ 20,000,000 $ 5,500,000 FFP
2323 Westley Drive (901)356-9382
Metropolis, DE 29435
T&M $ 18,000,000 $ 2,907,840 FFP
BM2017-002 HHSO100201700036B Spider Corp Peter Parker
37141 Webb Street (902)648-3758
Chicago, IL 68472
Total Flexibly Priced Subcontractor Costs $ 8,407,840 Sch. H
Fixed Price
BM2017-003 HHSO100201600036A Wayne Enterprises Bruce Wayne $ 2,500,000 $ 500,000 FFP
371 Bat Lane (563)875-9276
Gotham City, NJ 38747
Total Fixed Price Subcontractor Costs $ 500,000 Sch. H
Total Subcontract Costs $ 8,907,840 Sch. H
Commercial
BM2017-004 HHSO100201600038C Sanctum Sanctorum Stephen Strange, MD, PHD $ 4,000,000 2,750,000 FFP
76 Ancient One Road (563)875-9890
Greenwich Village, NYC

Sch. K

Big Money – Federal Segment
Schedule K
Summary of Hours and Amount on Time & Materials Contracts
Contract Number: HHSO100201700036B
Fiscal Year Ended 12/31/2017
Contract Labor Category Rate Hours Amount
Scientist I $160.00 27,000 $ 4,320,000
Scientist II $180.00 23,000 $ 4,140,000
Clinical Project Manager I $200.00 22,500 $ 4,500,000
Clinical Project Manager II $220.00 24,000 $ 5,280,000
Clinical Project Associate I $120.00 19,500 $ 2,340,000
Clinical Project Associate II $140.00 18,750 $ 2,625,000
Director $300.00 17,000 $ 5,100,000
$ 28,305,000
Other Direct Costs
Travel 185,000 Sch. H
Material 4,000,000 Sch. H
Subcontractors 2,907,840 Sch. H
Other Direct Costs 3,140,000 Sch. H
Subtotal $ 10,232,840
G&A Rate 9.16% Sch. A
G&A Applied to Othe Direct Costs $ 937,069
Total Claimed ODC Amount $ 11,169,909
Grand Total $ 39,474,909 Sch. I

Sch. L

Big Money – Federal Segment
Schedule L
Reconciliation of Total Payroll to Total Labor Distribution
Fiscal Year Ended 12/31/2017
Labor Distribution:
Direct Labor $ 32,600,000 Sch. H
Overhead Labor $ 9,500,000 Sch. C
G&A Indirect Labor $ 1,500,000 Sch. B
B&P Labor $ 300,000 Sch. B
IR&D Labor $ 100,000 Sch. B
Fringe Benefit Base $ 44,000,000
Paid Leave (Paid Time Off) $ 2,200,000 Sch. D
Total Labor Distribution $ 46,200,000
Adjustments
Restricted Stock Non-Recorded in GL $ 750,000
401K Contributions (Employee) $ (450,000)
Increase in Vacation Accrual Recorded in GL $ (25,000)
Adjusted Total $ 46,475,000
Total 941s:
1st Quarter $ 9,800,540
2nd Quarter $ 10,300,500
3rd Quarter $ 10,500,300
4th Quarter $ 10,873,660
Total 941s 41,475,000
Variance $ 5,000,000

Sch. M

Big Money – Federal Segment
Schedule M
Listing of Decisions, Agreements or Approvals
Accounting or Organizational Changes
Fiscal Year Ended 12/31/2017
A. Decisions/Agreements or Approvals
None
B. Accounting or Organization Changes.
None

Sch. N

Big Money – Federal Segment
Schedule N
Certificate of Final Indirect Costs
Fiscal Year Ended 12/31/2017
This is to certify that I have reviewed this proposal to establish final indirect cost rates
and to the best of my knowledge and belief:
1. All costs included in this Incurred Cost Submission proposal dated June 30, 2018,
to establish final indirect cost rates for Calendar Year Ended December 31, 2017,
are allowable in accordance with the cost principles of the Federal Acquisition
Regulation (FAR) and its supplements applicable to the contracts to which the final
indirect cost rates will apply; and
2. This proposal does not include any costs which are expressly unallowable under
applicable cost principles of the FAR or its supplements.
Firm:
Signature:
Name of Certifying Official:
Title:
Date of Execution:
NOTE: The Certificate of Final Indirect Costs is contained in FAR 52.242-4.

Sch. O

Big Money – Federal Segment
Schedule O
Schedule of Contract Closing Information For Those Contracts For Which
Work Effort Was Completed During the Fiscal Year Ended 12/31/2017
Level of Effort Cummulative Hours
Performance Period
Contract Number Order No. From To Ready to Close Contract Ceiling Amount Contract Fee Required Actual Notes
None N/A N/A N/A N/A N/A N/A N/A N/A N/A

Supp. Sch B

Big Money – Federal Segment
Supplemental Schedule B
Executive Compensation Information, Federal Segment
Fiscal Year Ended 12/31/2017
Executive Position G&A or Overhead Base Salary Bonus Other Compensation Total Compensation Voluntary Deletions Claimed Compensation Medicare Tax Directly Associated with Unallowable Compensation (1.45%)
President, Federal Segment G&A $ 486,450 $ 80,000 $ – 0 $ 566,450 $ (79,450) $ 487,000 $ (1,152)
Senior Federal Director, Human Resources G&A $ 461,200 $ 40,000 $ – 0 $ 501,200 $ (14,200) $ 487,000 $ (206)
Senior Federal Director, Business Development G&A $ 459,600 $ 45,000 $ – 0 $ 504,600 $ (17,600) $ 487,000 $ (255)
Senior Director, Lab Operations OH $ 451,250 $ 60,000 $ – 0 $ 511,250 $ (24,250) $ 487,000 $ (352)
Senior Director, Pharmeceutical Operations OH $ 449,100 $ 54,500 $ – 0 $ 503,600 $ (16,600) $ 487,000 $ (241)
Total Unallowable G&A $ (111,250) $ (1,613)
Schedule B
Total Unallowable OH $ (40,850) $ (592)
Schedule C
Total Voluntarily Deleted $ (152,100) $ (2,205)
Schedule D
Note: Amounts in excess of compensation limit relate to bonus payments.

ICP Checklist

CHECKLIST FOR DETERMINING
ADEQUACY OF CONTRACTOR INCURRED COST PROPOSAL
.Instructions: Auditors should complete this form for each incurred cost proposal submission and maintained a copy in the permanent file. Adequacy assessments of contractor incurred cost proposals include an assessment for completeness and accuracy of the submission, so the audit team can determine if the submission is auditable. Auditors are expected to use professional judgment in determining whether any specific missing/inadequate data or combination of missing/inadequate data is sufficient enough to warrant the submission as inadequate. The reviewer should consider the requirements of FAR 52.216-7(d) and the guidance in CAM 6-707.1 and 6-711.3b(1) when determining whether or not the submission is adequate. In making the assessment, the reviewer should determine if the proposal includes the required schedules and meets the requirements outlined in this checklist. In addition, the reviewer needs to ensure that math calculations and formulas used in each schedule are accurate. If the contractor generates internal reports identifying the required information in lieu of the example schedule, the reviewer should reference the contractor report on this form where the applicable schedule is listed.
A. GENERAL INFORMATION
Assignment Number                                                                                                                                       
Contractor/Segment Name
Fiscal Year Ending
Adequacy Determination
Proposal Received By Date Adequate
Proposal Evaluated By Date Inadequate*
Supervisory Approval Date Date Returned
B. INSTRUCTIONS BEFORE ASSESSING PROPOSAL ADEQUACY
Determine if the contractor is the prime on at least one government flexibly-priced contract. If yes, determine if all claimed prime contract costs are for Non-DoD agency contracts. If the contractor does not have a DoD contract, contact the Non-DoD agency to determine need for the incurred cost audit.
If all claimed costs are for subcontracts, contact the cognizant DCAA office(s) of the upper-tier contractor to determine the need for assist audit(s).
Coordinate with Field Detachment if the schedules contain any classified contract(s) and/or subcontract(s); mutual agreement regarding the completeness and accuracy of the incurred cost proposal should occur before accepting the proposal as adequate.
Determine if the contractor is using a blending of compensation caps approach to account for compensation costs in accordance with FAR 31.205-6(p). If using a blending approach, the audit team should contact the Administrative Contracting Officer (ACO) to notify them that the submission includes a blending approach. In some cases, the audit team may already be engaged with the ACO on working to execute an advance agreement, but if not, the audit team should notify the ACO that an advance agreement is needed in accordance with the DDP Memorandum, “Use of Blended Rates to Implement Multiple Compensation Caps” (October 25,
CHECKLIST FOR DETERMINING
ADEQUACY OF CONTRACTOR INCURRED COST PROPOSAL
2014). The audit team should offer to support the ACO’s execution of an advance agreement by performing a non-audit service under activity code 23600 (discussed in detail in MRD 16-PSP-005(R)). The audit team will still perform the adequacy assessment.
Sch Final Indirect Cost Rate Proposal Received Y/N/NA Adequate Y/N Comments
A Summary of All Claimed Indirect Expense Rates, Including Pool, Base, and Calculated Indirect Rate.
1. Did the contractor identify all claimed pools, bases, and rates, including COM (if applicable)?
2. Did the contractor provide a cost schedule for each final indirect pool claimed on Schedule A (Schedules Band C)?
3. Did the contractor provide a cost schedule for each intermediate cost pool claimed on Schedule A (Schedule D)?
4. Do total pool amounts from Schedule A tie to the total claimed expenses on Schedules Band C?
5. Do base amounts from Schedule A for intermediate cost pools tie to the base amounts on Schedule D?
6. Do base amounts from Schedule A for final pools tie to the base amounts on Schedule E?
B General & Administrative (G&A) Expenses (Final Indirect Cost Pool)
7. Do total G&A pool costs tie to Schedule H?
8. Did the contractor include explanatory notes for any amounts contained in an adjustment column or amounts omitted from the claim?
9. Do the intermediate allocations appear on source schedules (e.g., Schedule Bintermediate allocation amounts to Schedule D allocations)?
10. Was the applicable fringe and overheads applied to the IR&D/B&P?
C Overhead Expenses (Final Indirect Cost Pool)
11. Do total OH pool costs for each pool tie to Schedule H?
CHECKLIST FOR DETERMINING
ADEQUACY OF CONTRACTOR INCURRED COST PROPOSAL
Sch Final Indirect Cost Rate Proposal Received Y/N/NA Adequate Y/N Comments
12. Did the contractor include explanatory notes for any amounts contained in an adjustment column or amounts omitted from the claim?
13. Do the intermediate allocations appear on source schedules (e.g., Schedule C intermediate allocation amounts to Schedule D allocations)?
D Occupancy Expenses (Intermediate Indirect Cost Pool(s))
14. Did the contractor include explanatory notes for any amounts contained in an adjustment column or amounts omitted from the claim?
15. Do the intermediate allocations appear on source schedules (e.g., Schedule D intermediate allocations to Schedule B allocation amounts)?
16. Does the schedule identify (1) the allocation base by recipient, (2) the percentage of the total base for each recipient, and (3) the dollars allocated to each recipient?
E Claimed Allocation Bases by Element of Cost, Used to Distribute Indirect Costs
17. Does the schedule include an explanation of each base?
18. Do base amounts show individual cost elements that tie with costs on referenced schedules and include explanatory notes (e.g., direct cost elements in bases tie to Schedule H totals)?
F Facilities Capital Cost of Money Factors Computation
19. Do the allocation bases used match corresponding allocation bases claimed in Schedule A?
20. Did the contractor calculate a separate COM rate (if applicable) for each final indirect pool?
G Reconciliation of Books of Account and Claimed Direct Costs by Major Costs Element
CHECKLIST FOR DETERMINING
ADEQUACY OF CONTRACTOR INCURRED COST PROPOSAL
Sch Final Indirect Cost Rate Proposal Received Y/N/NA Adequate Y/N Comments
21. Do the direct cost amount per general ledger column tie to Schedule H?
22. Did the contractor include explanatory notes for any amounts contained in an adjustment column or amounts omitted from the claim?
H Schedule of Direct Costs by Contract and Subcontract and Indirect Expense Applied at Claimed Rates as well as a Subsidiary Schedule of Government Participation Percentages in Each of the Allocation Base Amounts.
23. Are the flexibly priced contracts and subcontracts, including commercial T&M, listed by contract and subtotaled by contract type? (Note: FFP and other commercial contracts may be shown on one summary line each)
24. Do subcontract costs incurred/claimed by contract tie to Schedule J?
25. Is the cost detail at the same level required by each contract, as specified in the billing instructions per thecontract clause, andlikely also usedfor billing purposes (e.g., by delivery order, taskorder, contract line item(CLIN), etc.)?
26. Were indirect expenses calculated using claimed rates from Schedule A?
27. Is the Government participation calculated for each indirect expense pool?
28. Do base amounts used for calculating Government participation tie to Schedules E and H?
I Schedule of Cumulative Direct and Indirect Costs Claimed and Billed by Contract and Subcontract
29. Is the cost detail in the same level used for billing costs (e.g., by delivery order)?
30. Do FY claimed dollars tie to Schedule H for cost type contracts?
31. Do FY claimed dollars tie to Schedule K (not Sch. H) for T&M contracts?
CHECKLIST FOR DETERMINING
ADEQUACY OF CONTRACTOR INCURRED COST PROPOSAL
Sch Final Indirect Cost Rate Proposal Received Y/N/NA Adequate Y/N Comments
32. Are prior years settled total costs the same as the prior year’s Cumulative Allowable Cost Worksheet?
33. Are contracts identified as physically complete reported on Schedule O?
J Subcontract Information
34. Does the schedule include all types of subcontracts (e.g., cost-type, T&M/LH, IDIQ with a variable element, and FFP) and inter- company costs claimed by the contractor on
flexibly priced prime contracts and/or upper-tier subcontracts?
35. Did the contractor include all of the detail for the subcontracts (e.g., subcontract number, prime contract number, subcontractor’s name and address, point of contact, subcontract value, costs incurred in the FY, and award type)?
K Summary of Each Time-and-Materials and / Labor Hour Contracts Information, Including Labor Categories, Labor Rates, Hours, and
Amounts; Direct Materials; Other Direct Costs; and, Indirect Expense Applied at Claimed Rates
36. Is the cost detail in the same level used for billing costs (e.g., by delivery order)?
37. Are all the contracts/delivery orders identified as T&M/LH on Schedule H reported on Schedule K?
38. Is the information presented by cost element,
with labor presented by labor category, showing contract labor rates (not actual rates and billed labor hours)?
39. Does the claimed indirect rate tie to Schedule A?
40. Does direct material and ODC claimed in Schedule K for each contract/delivery order tie to direct material and ODC claimed in Schedule H?
L Reconciliation of Total Payroll per IRS Form 941 to Total Labor Costs Distribution
CHECKLIST FOR DETERMINING
ADEQUACY OF CONTRACTOR INCURRED COST PROPOSAL
Sch Final Indirect Cost Rate Proposal Received Y/N/NA Adequate Y/N Comments
41. Do direct labor totals tie to totals on Schedule H?
42. Do G&A labor totals tie to totals on Schedule B?
43. Do other indirect pool labor totals tie to applicable pool schedules?
M List of Decisions, Agreements, Approvals, and Description of Accounting/Organizational Changes (e.g., Advance Agreement for Blended Rates).
44. Did the contractor provide a negative response if this schedule was not completed?
N Certificate of Final Indirect Costs
45. Is the certificate signed by an individual of the contractor’s organization at a level no lower than a vice president or chief financial officer of the business segment of the contractor that submits the proposal? (FAR 52.242-4(a)(3))
O Contract Closing Information for Contracts Physically Completed in this Fiscal Year
46. Are contracts reported here identified as physically complete, already closed or ready to close on Schedule I?
47. Does the schedule contain Level of Effort (LOE) information (LOE and actual hours), contract fee computations, period of performance, and contract ceiling amounts?
Overall Determination
Is the contractor’s incurred cost proposal adequate for audit?*
*If the overall determination is found to be inadequate for audit, provide rationale and support for your determination.
If the proposal is determined adequate, but the contractor is using a blending of compensation caps approach and there is no executed advance agreement, return the proposal to the contractor due to lack of an advance agreement and notify the contractor to resubmit the proposal only after executing an advance agreement with the ACO.
CHECKLIST FOR DETERMINING
ADEQUACY OF CONTRACTOR INCURRED COST PROPOSAL
If the proposal is incomplete, but determined adequate, contact the contractor to have them provide the necessary information to facilitate a timely audit.
If it is determined that the submission is inadequate, the auditor must provide a written description of any inadequacies to the contractor and contracting officer in accordance with FAR 42.705-1(b)(1)(iii). If the
information needed is not provided in a timely manner, the FAO should request ACO assistance. Maintain any correspondence with the contractor and ACO regarding requests for the incurred cost proposal and requests for additional information with this form. If the contractor is using a blending of compensation caps approach and there is no executed advance agreement, the inadequacy letter should include the statement, “The proposal includes a blending approach of compensation caps without an advance agreement. An advance agreement is required when a blending approach is used; therefore, the submission should not be resubmitted until such advance agreement is signed.”
C. AUDIT LEADS
List any audit leads or other significant risk identified during the proposal adequacy evaluation (e.g., any known business system deficiencies that have a significant impact on the final indirect rate proposal for this FY, significant risk identified by the contracting officer, math errors, incorrect rates were used on schedules, etc.)
Audit Lead Reference
D. CORRESPONDENCE
The contractor should be notified in writing of the need for additional information with a copy to the ACO. If the needed information is not provided in a timely manner, the FAO should request ACO assistance.
Date of Request Information Requested Date Information Received
Note: Attach any correspondence with the contractor regarding requests for the incurred cost proposal, requests for additional information if the proposal is not complete, and/or returning an inadequate proposal.

Rate Model —>

Fringe

Big Money – Federal Segment
Fringe Expense Pool & Base
12/31/17
Fringe Expense Pool:
Account # Account Name Trial Balance Adjustments Unallowable Ending Balance
600 – 001 Paid Leave (Paid Time Off) 2,200,000 – 0 – 0 2,200,000
600 – 002 Payroll Taxes 1,200,000 – 0 (2,205) 1,197,795
600 – 003 401K 750,000 – 0 – 0 750,000
600 – 004 Health Insurance 2,500,000 – 0 – 0 2,500,000
600 – 005 Life Insurance 750,000 – 0 – 0 750,000
600 – 006 Accidental Death & Dismembermant Insurance 720,000 – 0 – 0 720,000
600 – 007 Long Term Disability 900,000 – 0 – 0 900,000
600 – 008 Short Term Disability 600,000 – 0 – 0 600,000
600 – 009 Relocation Costs 150,000 – 0 – 0 150,000
600 – 010 Other Fringe Expenses 1,500,000 – 0 – 0 1,500,000
Total Fringe Pool 11,267,795
Fringe Allocation Base (Total Labor):
Account # Account Name Trial Balance Adjustments Unallowable Ending Balance
500 – 001 Direct Labor 32,600,000 – 0 – 0 32,600,000
700 – 001 Overhead Labor 9,500,000 – 0 – 0 9,500,000
800 – 001 G&A Indirect Labor 1,500,000 – 0 – 0 1,500,000
850 – 001 B&P Labor 300,000 – 0 – 0 300,000
875 – 001 IR&D Labor 100,000 – 0 – 0 100,000
Total Fringe Base 44,000,000
Fringe Rate 25.61%
Fringe Allocation Split Check
Direct Labor 8,348,411.42
Overhead Labor 2,432,819
G&A Indirect Labor 384,129.36
B&P Labor 76,826
IR&D Labor 25,609
Total Allocation 11,267,795 – 0

Facilities

Big Money – Federal Segment
Facilities Expense Pool & Base
12/31/17
Facilities Expense Pool:
Account # Account Name Trial Balance Adjustments Unallowable Ending Balance
650 – 001 Office Equipment & Furniture Rental 75,000 – 0 – 0 75,000
650 – 002 Maintenance 500,000 – 0 – 0 500,000
650 – 003 Leases 75,000 – 0 – 0 75,000
650 – 004 Utilities 5,000 – 0 – 0 5,000
650 – 005 Property Management Fees 10,000 – 0 – 0 10,000
650 – 006 Property Taxes 160,000 – 0 – 0 160,000
650 – 007 Security 140,000 – 0 – 0 140,000
Total Facilities Pool 965,000
Facilities Allocation Base (Square Footage):
Department Square Footage Allocation % Allocated Amount
Overhead 24,250 72% 698,545 Tab – Overhead
G&A 9,250 28% 266,455 Tab – G&A
Total Facilities Base 33,500

Overhead

Big Money – Federal Segment
Overhead Expense Pool & Base
12/31/17
Overhead Expense Pool:
Account # Account Name Trial Balance Adjustments Unallowable Ending Balance
700 – 001 Overhead Labor 9,500,000 – 0 – 0 9,500,000
700 – 002 Depreciation & Amortization 1,000,000 – 0 – 0 1,000,000
700 – 003 Material and Supplies 750,000 – 0 – 0 750,000
700 – 004 Shipping 3,000 – 0 – 0 3,000
700 – 005 Travel 1,200,000 – 0 (96,000) 1,104,000
700 – 006 Travel in Excess of Per Diem 50,000 – 0 (50,000) – 0
700 – 007 Entertainment 20,000 – 0 (20,000) – 0
700 – 008 Conferences 8,000 – 0 (400) 7,600
700 – 009 Severance Pay (for Direct Employees) 20,000 – 0 – 0 20,000
700 – 010 Bonus 250,000 – 0 (40,850) 209,150
700 – 011 Consultant Fees 500,000 – 0 (15,000) 485,000
Allocation Allocated Fringe – 0 2,432,819 – 0 2,432,819 Tab – Fringe
Allocation Allocated Facilities – 0 698,545 – 0 698,545 Tab – Facilities
Total Overhead Pool 16,210,114
Overhead Allocation Base (Direct Labor + Fringe):
Account # Account Name Trial Balance Adjustments Unallowable Ending Balance
500 – 001 Direct Labor 32,600,000 – 0 – 0 32,600,000
850 – 001 B&P Labor 300,000 – 0 – 0 300,000
875 – 001 IR&D Labor 100,000 – 0 – 0 100,000
Allocation Allocated Fringe – 0 8,450,846 – 0 8,450,846 Tab – Fringe
Total Overhead Base 41,450,846
Overhead Rate 39.11%

G&A

Big Money – Federal Segment
G&A Expense Pool & Base
12/31/17
Overhead Expense Pool:
Account # Account Name Trial Balance Adjustments Unallowable Ending Balance
800 – 001 G&A Indirect Labor 1,500,000 – 0 – 0 1,500,000
800 – 002 Accounting Fees 250,000 – 0 – 0 250,000
800 – 003 Depreciation & Amortization 300,000 – 0 – 0 300,000
800 – 004 Directors Fees & Expenses 250,000 – 0 – 0 250,000
800 – 005 Recruiting 350,000 – 0 – 0 350,000
800 – 006 Office Equipment & Furniture Rental 50,000 – 0 – 0 50,000
800 – 007 Severance Pay (for Indirect Employees) 15,000 – 0 – 0 15,000
800 – 008 Legal Fees – General 200,000 – 0 – 0 200,000
800 – 009 Material and Supplies 150,000 – 0 – 0 150,000
800 – 010 Bonus 150,000 – 0 (111,250) 38,750
800 – 011 Stockholders Expenses 200,000 – 0 – 0 200,000
800 – 012 Travel 300,000 – 0 (24,000) 276,000
800 – 013 Travel in Excess of Per Diem 35,000 – 0 (35,000) – 0
800 – 014 Entertainment 15,000 – 0 (15,000) – 0
850 – 001 B&P Labor 300,000 – 0 – 0 300,000
850 – 002 B&P Non-Labor Expense 150,000 – 0 – 0 150,000
875 – 001 IR&D Labor 100,000 – 0 – 0 100,000
875 – 002 IR&D Non-Labor Expense 50,000 – 0 – 0 50,000
Allocation Allocated Fringe on G&A Indirect Labor – 0 384,129 – 0 384,129 Tab – Fringe
Allocation Allocated Fringe on B&P Labor – 0 76,826 – 0 76,826 Tab – Fringe
Allocation Allocated Fringe on IR&D Labor – 0 25,609 – 0 25,609 Tab – Fringe
Allocation Allocated Overhead on B&P Labor – 0 147,365 – 0 147,365 Tab – Overhead
Allocation Allocated Overhead on IR&D Labor – 0 49,122 – 0 49,122 Tab – Overhead
Allocation Allocated Facilities – 0 266,455 – 0 266,455 Tab – Facilities
Allocation Allocated Home Office Human Resources – 0 571,875 – 0 571,875 Tab – Home Office
Allocation Allocated Home Office Residual Expense – 0 2,383,328 – 0 2,383,328 Tab – Home Office
Total G&A Pool 8,084,458
G&A Allocation Base (Total Cost Input):
Account # Balance Adjustments Ending Balance
Direct Labor 32,600,000 – 0 32,600,000 Tab – Overhead
Fringe on Direct Labor 8,348,411 – 0 8,348,411 Tab – Fringe
Direct ODC 8,155,880 – 0 8,155,880 Tab – Trial Balance
Direct Material 11,000,000 – 0 11,000,000 Tab – Trial Balance
Direct Travel 282,500 – 0 282,500 Tab – Trial Balance
Direct Subcontractors 11,657,840 – 0 11,657,840 Tab – Trial Balance
Total Overhead Pool (Including Allocations) 16,210,114 – 0 16,210,114 Tab – Overhead
Unallowable Overhead 222,250 – 0 222,250 Tab – Overhead
Unallowable Fringe 2,205 – 0 2,205 Tab – Fringe
Less: Overhead Allocated to B&P and IR&D (196,486)
Total G&A Base 88,282,715
G&A Rate 9.16%

Home Office

Big Money – Federal Division
Home Office Expense Allocations
12/31/17
Home Office Human Resources Allocation: Residual Home Office Expense Allocation:
Home Office Human Resources Pool 1,200,000 Home Office Residual Expense Pool 4,500,000
Allocation Base (Headcount): Allocation Base (Three Factor Formula):
Segment Headcount Allocation % Allocated Amount Segment Revenue Assets NBV Payroll (Labor) Avg %
Federal Segment Headcount 122 48% 571,875 Tab – G&A Federal Segment 110,000,000 56% 1,566,720 49% 44,000,000 54% 53%
Commercial Logistics Segment Headcount 75 29% 351,563 Commercial Logistics Segment 47,142,857 24% 843,619 26% 21,753,846 27% 26%
Research Services Segment Headcount 59 23% 276,563 Research Services Segment 40,123,127 20% 801,617 25% 15,205,200 19% 21%
Total Headcount 256 1,200,000 Total 197,265,984 100% 3,211,956 100% 80,959,046 100% 100%
Residual Allocation Split:
Federal Segment 53% 2,383,328 Tab – G&A
Commercial Logistics Segment 26% 1,155,499
Research Services Segment 21% 961,174
Total 4,500,000

Bases

Big Money – Federal Divison
Allocation Bases
12/31/17
Fringe Benefits (Total Labor)
500 – 001 Direct Labor
700 – 001 Overhead Labor
800 – 001 G&A Indirect Labor
850 – 001 B&P Labor
875 – 001 IR&D Labor
0 – 0
0 – 0 0.00%
Federal OH
0 – 0
0 Overhead Rate
0 – 0
0 – 0
– 0
0.00%
General & Administrative (Total Cost Input Excluding G&A expenses)
Federal Direct Labor – 0
Federal Labor Fringe – 0
Federal O/H – 0
ODCs – 0
Less: Cust. Site O/H Associated with B&P – 0
Total G&A Base – 0 0.00%
Total G&A Cost – 0
HO & U/A Adjustment – 0
Total Cost – 0

Unallowable Summary

Rate Proof

PSR Contract 1

Contract #1
Project Status Reports
12/31/09
Direct Labor
Direct Labor Customer Site 12,000,000
Direct Labor Corporate Site – 0
Total Direct Labor 12,000,000
Other Direct Costs
Materials 4,000,000
Subcontractrors 2,000,000
ODCs 2,000,000
Total Non-Labor Direct Costs 8,000,000
Total Direct Costs 20,000,000

PSR Contract 2

Contract #2
Project Status Reports
12/31/09
Direct Labor
Direct Labor Customer Site 2,000,000
Direct Labor Corporate Site 1,500,000
Total Direct Labor 3,500,000
Other Direct Costs
Materials 150,000
Subcontractrors – 0
ODCs 750,000
Total Non-Labor Direct Costs 900,000
Total Direct Costs 4,400,000

PSR Contract 3

Contract #3
Project Status Reports
12/31/09
Direct Labor
Direct Labor Customer Site 2,500,000
Direct Labor Corporate Site – 0
Total Direct Labor 2,500,000
Other Direct Costs
Materials 250,000
Subcontractrors – 0
ODCs 200,000
Total Non-Labor Direct Costs 450,000
Total Direct Costs 2,950,000

Labor Hours Contract 3

Contract #3
Labor Hours Summary
12/31/09
Labor Category Hours Rate Cost
Guard 15,000 75.00 $ 1,125,000
Senior Guard 7,000 100.00 700,000
Admin 680 25.00 17,000
Supervisor 1,200 150.00 180,000
Guard 20,000 78.75 1,575,000
Senior Guard 9,000 105.00 945,000
Admin 1,000 26.25 26,250
Supervisor 1,500 157.50 236,250
Total Direct Labor 55,380 4,804,500

Instructions

Big Money – Federal Division
CAPC Instructions
Background
– Big Money, Inc. (Big Money) is a contractor who provides pharmaceutical services to the Federal Government
– Previously, Baker Tilly has been engaged by Big Money to complete incurred cost proposals
– Big Money is making two unilateral cost accounting practice changes and have engaged us to help prepare a GDM
– The CAPCs will go into effect at the beginning of FY18 (January 1, 2018)
– One CAPC will be modeled during class and the other CAPC will be modeled as homework
– Baker Tilly plans to use Big Money’s FY17 ICP in order to perform the GDM analysis
Follow the Four Step Cost Impact Process – Change #1
Step 1a: Identify Change – Bonus Costs Moving to the Fringe Pool
– Big Money is expanding their bonus compensation program to include more employees
– Historically, Big Money only paid bonuses to direct contract facing individuals and executives (bonuses for direct facing individuals were allocated via Overhead) (bonuses for executives were allocated via G&A)
– Moving forward, all full-time employees will be eligible for a bonus (based on various qualitative and quantitative performance targets)
– Since bonus cost is no longer specific to direct facing individuals and executives, Big Money will be moving all bonus costs from their original pools to the Fringe pool
– This is a Cost Accounting Practice Change (CAPC) due to a change in allocation method for bonus costs
Step 1b: Perform Indirect Rate Modeling
Make the following necessary adjustments to Schedules A, B, C, D (as applicable) in order to process the CAPC
– Remove bonus costs from OH (Sch. C-1)
– Remove bonus costs from G&A (Sch. B)
– Add bonus costs to Fringe (Sch. D-1)
– Review the Sch. A to ensure the rate differences logically make sense
Step 2: Determine Impact Population
– Review Schedule H to determine the affected contract population
Step 3: Calculate Impact
– Calculate the difference in cost between utilizing the “current state” indirect rates and the “future state” indirect rates by contract on Schedule H (Total Costs Updated minus Total Costs Original)
– Calculate the number of days each contract is active in FY17 (assume 365 days in a year)
*** Utilize the following formula: DAYS(end date, start date)+1
– Calculate the FY17 impact per day
– Calculate the number of days remaining on each contract from the CAPC implementation date to the contract’s end date (assume 365 days in a year)
*** Reminder: CAPC will go into effect at the beginning of FY18 (January 1, 2018)
*** Utilize the following formula: DAYS(end date, start date)+1
– Calculate the total impact
– Utilize “cost impact math” to determine the increase/decrease in cost to the Government (Big Money will be treating T&M contracts as FFP for cost impact calculations)
– Summarize results by contract type and agency on the Impact Summary tab

Impact Summary

Change #1
Total Impact – Updated
Cost Type (642)
Commercial – 0
DOD (642)
DOE – 0
Time & Materials (6,188)
Commercial – 0
DOD (6,188)
DOE – 0
Fixed Price – 0
Commercial – 0
DOD – 0
DOE – 0
Net Impact to Gov’t (6,830)

ICS Template —>

Trial Balance

Big Money – Federal Segment
Trial Balance
For the Period Ending 12/31/17
Account # Account Type Account Name U/A Labor/Non-Labor Balance
500 – 001 Direct Direct Labor Allowable Labor 32,600,000
500 – 002 Direct Direct Materials Allowable Non-Labor 11,000,000
500 – 003 Direct Direct ODC Allowable Non-Labor 8,155,880
500 – 004 Direct Direct Travel Allowable Non-Labor 282,500
500 – 005 Direct Direct Subcontractors Allowable Non-Labor 11,657,840
600 – 001 Fringe Paid Leave (Paid Time Off) Allowable Non-Labor 2,200,000
600 – 002 Fringe Payroll Taxes Allowable Non-Labor 1,200,000
600 – 003 Fringe 401K Allowable Non-Labor 750,000
600 – 004 Fringe Health Insurance Allowable Non-Labor 2,500,000
600 – 005 Fringe Life Insurance Allowable Non-Labor 750,000
600 – 006 Fringe Accidental Death & Dismembermant Insurance Allowable Non-Labor 720,000
600 – 007 Fringe Long Term Disability Allowable Non-Labor 900,000
600 – 008 Fringe Short Term Disability Allowable Non-Labor 600,000
600 – 009 Fringe Relocation Costs Allowable Non-Labor 150,000
600 – 010 Fringe Other Fringe Expenses Allowable Non-Labor 1,500,000
650 – 001 Facilities Office Equipment & Furniture Rental Allowable Non-Labor 75,000
650 – 002 Facilities Maintenance Allowable Non-Labor 500,000
650 – 003 Facilities Leases Allowable Non-Labor 75,000
650 – 004 Facilities Utilities Allowable Non-Labor 5,000
650 – 005 Facilities Property Management Fees Allowable Non-Labor 10,000
650 – 006 Facilities Property Taxes Allowable Non-Labor 160,000
650 – 007 Facilities Security Allowable Non-Labor 140,000
700 – 001 Federal OH Overhead Labor Allowable Labor 9,500,000
700 – 002 Federal OH Depreciation & Amortization Allowable Non-Labor 1,000,000
700 – 003 Federal OH Material and Supplies Allowable Non-Labor 750,000
700 – 004 Federal OH Shipping Allowable Non-Labor 3,000
700 – 005 Federal OH Travel Allowable Non-Labor 1,200,000
700 – 006 Federal OH Travel in Excess of Per Diem Unallowable Non-Labor 50,000
700 – 007 Federal OH Entertainment Unallowable Non-Labor 20,000
700 – 008 Federal OH Conferences Allowable Non-Labor 8,000
700 – 009 Federal OH Severance Pay (for Direct Employees) Allowable Non-Labor 20,000
700 – 010 Federal OH Bonus Allowable Non-Labor 250,000
700 – 011 Federal OH Consultant Fees Allowable Non-Labor 500,000
800 – 001 G&A G&A Indirect Labor Allowable Labor 1,500,000
800 – 002 G&A Accounting Fees Allowable Non-Labor 250,000
800 – 003 G&A Depreciation & Amortization Allowable Non-Labor 300,000
800 – 004 G&A Directors Fees & Expenses Allowable Non-Labor 250,000
800 – 005 G&A Recruiting Allowable Non-Labor 350,000
800 – 006 G&A Office Equipment & Furniture Rental Allowable Non-Labor 50,000
800 – 007 G&A Severance Pay (for Indirect Employees) Allowable Non-Labor 15,000
800 – 008 G&A Legal Fees – General Allowable Non-Labor 200,000
800 – 009 G&A Material and Supplies Allowable Non-Labor 150,000
800 – 010 G&A Bonus Allowable Non-Labor 150,000
800 – 011 G&A Stockholders Expenses Allowable Non-Labor 200,000
800 – 012 G&A Travel Allowable Non-Labor 300,000
800 – 013 G&A Travel in Excess of Per Diem Unallowable Non-Labor 35,000
800 – 014 G&A Entertainment Unallowable Non-Labor 15,000
850 – 001 B&P B&P Labor Allowable Labor 300,000
850 – 002 B&P B&P Travel Allowable Non-Labor 150,000
875 – 001 IR&D IR&D Labor Allowable Labor 100,000
875 – 002 IR&D IR&D Travel Allowable Non-Labor 50,000

Index

Big Money – Federal Segment
Fiscal Year Ended 12/31/2017
Index
Schedule A Summary of Claimed Indirect Expense Rates
Schedule B General and Administrative Expenses
Schedule C Overhead Expenses
Schedule D-1 Fringe Expenses
Schedule D-2 Facility Expenses
Schedule D-3 Corporate Home Office Expense (Human Resourced and Corporate Residual)
Schedule E Claimed Allocation Bases
Schedule F Not Applicable
Schedule G Reconciliation of Books of Accounts and Claimed Direct Costs
Schedule H Schedule of Direct Costs by Contract/Subcontract and Indirect Expenses Applied at Claimed Rates
Schedule H-1 Government Participation in Indirect Cost Pools
Schedule I Schedule of Cumulative Direct and Indirect Costs Claimed and Billed
Schedule J Subcontract Information
Schedule K Summary of Hours and Amounts on T&M/Labor Hour Contracts
Schedule L Reconciliation of Total Payroll to Total Payroll Distributed
Schedule M Listing of Decisions/Agreements/Approvals and Description of Accounting/Organizational Changes
Schedule N Indirect Cost Certification
Schedule O Schedule of Ready to Be Closed Contracts For Those Contracts Which Work Effort Was Completed During FY 2017
Supplemental Schedule B Executive Compensation Information

Sch. A

Big Money – Federal Segment
Schedule A
Summary of Claimed Indirect Expense Rates
Fiscal Year Ended 12/31/2017
Description Updated Rates Original Rates Change Reference
Fringe Expense Rate
Expense Pool 11,667,795 11,267,795 400,000 Sch. D-1
Allocation Base 44,000,000 44,000,000 – 0 Sch. E & D-1
Fringe Expense Rate 26.52% 25.61% 0.91%
Overhead Expense Rate
Expense Pool 16,087,328 16,250,964 (163,636) Sch. C-1
Allocation Base 41,750,846 41,450,846 300,000 Sch. E
Overhead Expense Rate 38.53% 39.21% -0.67%
Material & Handling Expense Rate
Expense Pool – 0 – 0 – 0 Sch. C-2
Allocation Base – 0 – 0 – 0 Sch. E
Overhead Expense Rate 0.00% 0.00% 0.00%
General and Administrative Rate
Expense Pool 8,061,492 8,196,203 (134,711) Sch. B
Allocation Base 88,416,930 88,282,220 134,711 Sch. E
G&A Expense Rate 9.12% 9.28% -0.17%

Sch. B

Big Money – Federal Segment
Schedule B
General & Administrative Expenses
Fiscal Year Ended 12/31/2017
Account # Account Name Trial Balance Adjustments Unallowable CAPC Adj. Ending Balance Reference Notes
800 – 001 G&A Indirect Labor 1,500,000 – 0 – 0 1,500,000
800 – 002 Accounting Fees 250,000 – 0 – 0 250,000
800 – 003 Depreciation & Amortization 300,000 – 0 – 0 300,000
800 – 004 Directors Fees & Expenses 250,000 – 0 – 0 250,000
800 – 005 Recruiting 350,000 – 0 – 0 350,000
800 – 006 Office Equipment & Furniture Rental 50,000 – 0 – 0 50,000
800 – 007 Severance Pay (for Indirect Employees) 15,000 – 0 – 0 15,000
800 – 008 Legal Fees – General 200,000 – 0 – 0 200,000
800 – 009 Material and Supplies 150,000 – 0 – 0 150,000
800 – 010 Bonus 150,000 – 0 – 0 (150,000) – 0
800 – 011 Stockholders Expenses 200,000 – 0 – 0 200,000
800 – 012 Travel 300,000 – 0 (24,000) 276,000 Unallowable Sample (8%)
800 – 013 Travel in Excess of Per Diem 35,000 – 0 (35,000) – 0 Wholly Unallowable Account
800 – 014 Entertainment 15,000 – 0 (15,000) – 0 Wholly Unallowable Account
850 – 001 B&P Labor 300,000 – 0 – 0 300,000
850 – 002 B&P Travel 150,000 – 0 – 0 150,000
875 – 001 IR&D Labor 100,000 – 0 – 0 100,000
875 – 002 IR&D Travel 50,000 – 0 – 0 50,000
Subtotal G&A Pool 4,365,000 – 0 (74,000) (150,000) 4,141,000
Intermediate Allocations:
Allocation Allocated Fringe on G&A Indirect Labor – 0 397,766 – 0 397,766 Sch. D-1
Allocation Allocated Fringe on B&P Labor – 0 79,553 – 0 79,553 Sch. D-1
Allocation Allocated Fringe on IR&D Labor – 0 26,518 – 0 26,518 Sch. D-1
Allocation Allocated Overhead on B&P Labor – 0 146,248 – 0 146,248 Sch. E
Allocation Allocated Overhead on IR&D Labor – 0 48,749 – 0 48,749
Allocation Allocated Facilities – 0 266,455 – 0 266,455 Sch. D-2
Allocation Allocated Home Office Human Resources – 0 571,875 – 0 571,875 Sch. D-3
Allocation Allocated Home Office Residual Expense – 0 2,383,328 – 0 2,383,328 Sch. D-3
Total G&A Pool 4,365,000 3,920,492 (74,000) (150,000) 8,061,492

Sch. C-1

Big Money – Federal Segment
Schedule C-1
Overhead Expenses
Fiscal Year Ended 12/31/2017
Account # Account Name Trial Balance Adjustments Unallowable CAPC Adj. Ending Balance Reference Notes
700 – 001 Overhead Labor 9,500,000 – 0 – 0 9,500,000
700 – 002 Depreciation & Amortization 1,000,000 – 0 – 0 1,000,000
700 – 003 Material and Supplies 750,000 – 0 – 0 750,000
700 – 004 Shipping 3,000 – 0 – 0 3,000
700 – 005 Travel 1,200,000 – 0 (96,000) 1,104,000 Unallowable Sample (8%)
700 – 006 Travel in Excess of Per Diem 50,000 – 0 (50,000) – 0 Wholly Unallowable Account
700 – 007 Entertainment 20,000 – 0 (20,000) – 0 Wholly Unallowable Account
700 – 008 Conferences 8,000 – 0 (400) 7,600 Unallowable Sample (5%)
700 – 009 Severance Pay (for Direct Employees) 20,000 – 0 – 0 20,000
700 – 010 Bonus 250,000 – 0 – 0 (250,000) – 0
700 – 011 Consultant Fees 500,000 – 0 (15,000) 485,000 Unallowable Sample (3%)
Subtotal Overhead Pool 13,301,000 – 0 (181,400) (250,000) 12,869,600
Intermediate Allocations:
Allocation Allocated Fringe – 0 2,519,183 – 0 2,519,183 Sch. D-1
Allocation Allocated Facilities – 0 698,545 – 0 698,545 Sch. D-2
Total Overhead Pool 13,301,000 3,217,728 (181,400) (250,000) 16,087,328

Sch. C-2

Big Money – Federal Segment
Schedule C-2
Material & Handling Expenses
Fiscal Year Ended 12/31/2017
Account # Account Name Trial Balance Adjustments Unallowable CAPC Adj. Ending Balance Reference Notes
CAPC Adjustment – 0 – 0 – 0
Subtotal M&H Pool – 0 – 0 – 0 – 0 – 0
Intermediate Allocations:
Allocation Allocated Fringe – 0 Sch. D-1
Total M&H Pool – 0 – 0 – 0 – 0 – 0

Sch. D-1

Big Money – Federal Segment
Schedule D-1
Fringe Expense Pool & Base
Fiscal Year Ended 12/31/2017
Fringe Expense Pool:
Account # Account Name Trial Balance Adjustments Unallowable CAPC Adj. Ending Balance Reference Notes
600 – 001 Paid Leave (Paid Time Off) 2,200,000 – 0 – 0 2,200,000
600 – 002 Payroll Taxes 1,200,000 – 0 (2,205) 1,197,795 Supp. Sch. B Unallowable Medicare
600 – 003 401K 750,000 – 0 – 0 750,000
600 – 004 Health Insurance 2,500,000 – 0 – 0 2,500,000
600 – 005 Life Insurance 750,000 – 0 – 0 750,000
600 – 006 Accidental Death & Dismembermant Insurance 720,000 – 0 – 0 720,000
600 – 007 Long Term Disability 900,000 – 0 – 0 900,000
600 – 008 Short Term Disability 600,000 – 0 – 0 600,000
600 – 009 Relocation Costs 150,000 – 0 – 0 150,000
600 – 010 Other Fringe Expenses 1,500,000 – 0 – 0 1,500,000
CAPC Adjustment 400,000 400,000
Total Fringe Pool 11,667,795
Fringe Allocation Base (Total Labor):
Account # Account Name Trial Balance Adjustments Unallowable CAPC Adj. Ending Balance
500 – 001 Direct Labor 32,600,000 – 0 – 0 32,600,000
700 – 001 Overhead Labor 9,500,000 – 0 – 0 9,500,000
800 – 001 G&A Indirect Labor 1,500,000 – 0 – 0 1,500,000
850 – 001 B&P Labor 300,000 – 0 – 0 300,000
875 – 001 IR&D Labor 100,000 – 0 – 0 100,000
CAPC Adjustment – 0 – 0 – 0 – 0
Total Fringe Base 44,000,000
Fringe Rate 26.52%
Fringe Allocation Split
Direct Labor 8,644,775 Sch. E
Overhead Labor 2,519,183 Sch. C
G&A Indirect Labor 397,766 Sch. B
B&P Labor 79,553 Sch. B
IR&D Labor 26,518 Sch. B
CAPC Adjustment – 0 Sch. B
Total Allocation 11,667,795 Sch. A

Sch. D-2

Big Money – Federal Segment
Schedule D-2
Facilities Expense Pool & Base
Fiscal Year Ended 12/31/2017
Facilities Expense Pool:
Account # Account Name Trial Balance Adjustments Unallowable CAPC Adj. Ending Balance Reference Notes
650 – 001 Office Equipment & Furniture Rental 75,000 – 0 – 0 75,000
650 – 002 Maintenance 500,000 – 0 – 0 500,000
650 – 003 Leases 75,000 – 0 – 0 75,000
650 – 004 Utilities 5,000 – 0 – 0 5,000
650 – 005 Property Management Fees 10,000 – 0 – 0 10,000
650 – 006 Property Taxes 160,000 – 0 – 0 160,000
650 – 007 Security 140,000 – 0 – 0 140,000
Total Facilities Pool 965,000
Facilities Allocation Base (Square Footage):
Department Square Footage Allocation % Allocated Amount
Overhead 24,250 72% 698,545 Sch. C
G&A 9,250 28% 266,455 Sch. B
Total Facilities Base 33,500

Sch. D-3

Big Money – Federal Segment
Schedule D-3
Home Office Expense Allocations
Fiscal Year Ended 12/31/2017
Home Office Human Resources Allocation: Residual Home Office Expense Allocation:
Home Office Human Resources Pool 1,200,000 Home Office Residual Expense Pool 4,500,000
Allocation Base (Headcount): Allocation Base (Three Factor Formula):
Segment Headcount Allocation % Allocated Amount Segment Revenue Assets NBV Payroll (Labor) Avg %
Federal Segment Headcount 122 48% 571,875 Sch. B Federal Segment 110,000,000 56% 1,566,720 49% 44,000,000 54% 53%
Commercial Logistics Segment Headcount 75 29% 351,563 Commercial Logistics Segment 47,142,857 24% 843,619 26% 21,753,846 27% 26%
Research Services Segment Headcount 59 23% 276,563 Research Services Segment 40,123,127 20% 801,617 25% 15,205,200 19% 21%
Total Headcount 256 1,200,000 Total 197,265,984 100% 3,211,956 100% 80,959,046 100% 100%
Residual Allocation Split:
Federal Segment 53% 2,383,328 Sch. B
Commercial Logistics Segment 26% 1,155,499
Research Services Segment 21% 961,174
Total 4,500,000

Sch. E

Big Money – Federal Segment
Schedule E
Claimed Allocation Bases
Fiscal Year Ended 12/31/2017
Fringe Allocation Base:
Account # Account Name Trial Balance Adjustments CAPC Adj. Ending Balance Reference Notes
500 – 001 Direct Labor 32,600,000 – 0 32,600,000 Sch. G
700 – 001 Overhead Labor 9,500,000 – 0 9,500,000 Sch. C
800 – 001 G&A Indirect Labor 1,500,000 – 0 1,500,000 Sch. B
850 – 001 B&P Labor 300,000 – 0 300,000 Sch. G
875 – 001 IR&D Labor 100,000 – 0 100,000 Sch. G
Total Fringe Base 44,000,000 Sch. A
Base Description: Total Payroll dollars of direct and indirect employees (Total Labor).
Overhead Allocation Base
Account # Account Name Trial Balance Adjustments CAPC Adj. Ending Balance
500 – 001 Direct Labor 32,600,000 – 0 32,600,000 Sch. G
850 – 001 B&P Labor 300,000 – 0 300,000 Sch. B
875 – 001 IR&D Labor 100,000 – 0 100,000 Sch. B
Allocation Fringe on Direct Labor – 0 8,644,775 8,644,775 Sch. D-1
Allocation Fringe on B&P Labor – 0 79,553 79,553 Sch. D-1
Allocation Fringe on IR&D Labor – 0 26,518 26,518 Sch. D-1
Total Overhead Base 41,750,846 Sch. A
Base Description: Total Direct Labor, IR&D Labor, and B&P labor plus applicable Fringe costs.
Material & Handling Allocation Base
Account # Account Name Trial Balance Adjustments CAPC Adj. Ending Balance
CAPC Adjustment – 0 – 0 – 0 Sch. G
Total M&H Base – 0 Sch. A
Base Description:
G&A Allocation Base
Description Trial Balance Adjustments CAPC Adj. Ending Balance
Direct Labor 32,600,000 – 0 32,600,000 Sch. G
Fringe on Direct Labor 8,644,775 – 0 8,644,775 Sch. D-1
Direct ODC 8,155,880 – 0 8,155,880 Sch. G
Direct Material 11,000,000 – 0 11,000,000 Sch. G
Direct Travel 282,500 – 0 282,500 Sch. G
Direct Subcontractors 11,657,840 – 0 11,657,840 Sch. G
Applied Overhead 15,892,330 – 0 15,892,330 Sch. C
Less: Overhead Allocated to B&P and IR&D – 0 – 0 Sch. B
Unallowable Overhead 181,400 – 0 181,400 Sch. C
Unallowable Fringe 2,205 – 0 2,205 Sch. D-1
Total G&A Base 88,416,930 Sch. A
Base Description: Total Cost Input.

Sch. G

Big Money – Federal Segment
Schedule G
Reconciliation of Books of Accounts and Claimed Direct Costs
Fiscal Year Ended 12/31/2017
Description Trial Balance Adjustments Claimed Costs Reference Notes
Direct Labor 32,600,000 – 0 32,600,000 Sch. H & E
Direct Travel 282,500 – 0 282,500 Sch. H & E
Direct Materials 11,000,000 – 0 11,000,000 Sch. H & E
Direct Subcontractors 11,657,840 – 0 11,657,840 Sch. H & E
Direct ODC 8,155,880 – 0 8,155,880 Sch. H & E
B&P Labor 300,000 – 0 300,000 Sch. H & E
B&P Travel 150,000 – 0 150,000 Sch. H & E
IR&D Labor 100,000 – 0 100,000 Sch. H & E
IR&D Travel 50,000 – 0 50,000 Sch. H & E
Total Direct Costs 64,296,220 – 0 64,296,220
Note: Claimed Direct Costs include B&P and IR&D

Sch. H

Big Money – Federal Segment Fiscal Year Start Fiscal Year End CAPC Implementation Date
Schedule H 1/1/17 12/31/17 1/1/18
Contract Direct Costs by Contract/Subcontract & Indirect Expenses Applied at Claimed Rates
Fiscal Year Ended 12/31/2017
Direct Costs
Fringe Benefit Overhead M&H Plus Claimed G&A @
Other Direct Total Direct @ Claimed Rate @ Claimed Rate @ Claimed Rate Overhead and Claimed Rate Cost Impact Math
Contract Type Contract Number CAS Covered Executive Agency PoP Start PoP End Total Costs – Original Direct Labor Direct Travel Direct Material Subcontracts Costs Costs 26.52% 38.53% Fringe Benefits 9.12% Total Costs – Updated FY17 Total Cost Comparison FY17 Days Active Impact per Day ETC Days Total Impact Total Impact – Updated
Sch. A Sch. A Sch. A
Cost Type HHSO100201500028C Yes DOD 10/25/16 6/1/18 38,300,359 12,600,000 65,000 4,500,000 5,500,000 2,950,000 25,615,000 3,341,232 6,142,434 35,098,666 3,200,152 38,298,818 (1,541) 365 (4) 152 (642) (642)
Time & Materials HHSO100201700036B Yes DOD 6/5/17 11/30/18 36,215,339 13,100,000 185,000 4,000,000 2,907,840 3,140,000 23,332,840 3,473,821 6,386,182 33,192,842 3,026,387 36,219,229 3,891 210 19 334 6,188 (6,188)
Fixed Price HHSO100201600036A Yes DOE 2/1/16 6/30/17 5,096,032 1,900,000 – 0 250,000 500,000 590,880 3,240,880 503,837 926,240 4,670,957 425,879 5,096,835 803 181 4 – 0 – 0 – 0
Commerical HHSO100201600038C No N/A 5/10/15 12/1/18 16,666,041 5,000,000 32,500 2,250,000 2,750,000 1,475,000 11,507,500 1,325,886 2,437,474 15,270,860 1,392,334 16,663,194
Total Contract Costs 96,277,771 32,600,000 282,500 11,000,000 11,657,840 8,155,880 63,696,220 8,644,775 15,892,330 – 0 88,233,325 8,044,752 96,278,077
B&P 300,000 150,000 – 0 – 0 – 0 450,000 79,553 146,248 – 0
IR&D 100,000 50,000 – 0 – 0 – 0 150,000 26,518 48,749 – 0
Grand Total 96,277,771 33,000,000 482,500 11,000,000 11,657,840 8,155,880 64,296,220 8,750,846 16,087,328 – 0 88,233,325 8,044,752 96,278,077
Sch. J Sch. G
Reconciliations to Schedule A:
Fringe on OH Labor 2,519,183 Sch. D-1
Fringe on G&A Labor 397,766 Sch. D-1
Unallowable OH 181,400 16,539
Unallowable Fringe 2,205 201
11,667,795 16,087,328 – 0 88,416,930 8,061,492
Sch. A Sch. A Sch. A & H-1 Sch. A
$ – 0 0 0 0

Sch. H-1

Big Money – Federal Segment
Schedule H-1
Government Participation In Indirect Pools
Fiscal Year Ended 12/31/2017
Overhead G&A
Contract Type Base Amount % Base Amount %
Sch. H Sch. H
Cost-Type 15,941,232 45.00% 35,098,666 47.98%
Time & Materials 16,573,821 46.79% 33,192,842 45.38%
Fixed Price 2,403,837 6.79% 4,670,957 6.39%
B&P and IR&D 506,071 1.43% – 0 0.00%
Unallowable Overhead – 0 0.00% 181,400 0.25%
Unallowable Fringe – 0 0.00% 2,205 0.00%
Total 35,424,960 100.00% 73,146,071 100.00%

Sch. I

Big Money – Federal Segment
Schedule I
Schedule Of Cumulative Direct and Indirect Costs Claimed and Billed
Fiscal Year Ended 12/31/2017
Prior Years Direct and Direct Less Contract Amount of Cumulative Amount Over (Under)
Direct and Indirect Costs Settled Direct & Indirect Costs and Indirect Contract Net Cumulative Value Contract Excluding Fixed Fee Billed vs. Physically
Using Audited Rates Indirect Costs Using Claimed Rates Costs Limitations Costs Settled Excluding Value Billed Through 12/31/2017 Total Costs Complete?
Contract No. 2006 2006 2007 2008 2009 2015 – 2016 2017 Total Rebates/Credits or Claimed Fee Remaining PV # Amount Incurred (Y/N)
Cost Type
HHSO100201500028C $ – 0 $ – 0 $ – 0 $ – 0 $ – 0 $ 30,288,201 $ 38,298,818 $ 68,587,019 $ – 0 $ 68,587,019 $ 75,000,000 $ 6,412,981 22 $ 70,685,750 $ 2,098,731 N
Subtotal – Cost Type $ – 0 $ – 0 $ – 0 $ – 0 $ – 0 $ 30,288,201 $ 38,298,818 $ 68,587,019 $ – 0 $ 68,587,019 $ 75,000,000 $ 6,412,981 $ 70,685,750 $ 2,098,731
Sch. H
Time & Materials
HHSO100201700036B $ – 0 $ 39,470,828 $ 39,470,828 $ – 0 $ 39,470,828 $ 50,000,000 $ 10,529,172 12 $ 37,081,959 $ (2,388,869) N
Subtotal – T&M $ – 0 $ 39,470,828 $ 39,470,828 $ – 0 $ 39,470,828 $ 50,000,000 $ 10,529,172 $ 37,081,959 $ (2,388,869)
Sch. K
Grand Total $ 30,288,201 $ 77,769,647 $ 108,057,848 $ – 0 $ 108,057,848 $ 107,767,709 $ (290,139)

Sch. J

Big Money – Federal Segment
Schedule J
Schedule of Subcontract Information
Fiscal Year Ended 12/31/2017
Subcontract Number Prime Contract Number Subcontractor Name & Address Point of Contact Phone Number Subcontract Approval Value FY17 Incurred Costs Subcontract Award Type
Cost Type
BM2017-001 HHSO100201500028C Daily Planet Clark Kent $ 20,000,000 $ 5,500,000 FFP
2323 Westley Drive (901)356-9382
Metropolis, DE 29435
T&M $ 18,000,000 $ 2,907,840 FFP
BM2017-002 HHSO100201700036B Spider Corp Peter Parker
37141 Webb Street (902)648-3758
Chicago, IL 68472
Total Flexibly Priced Subcontractor Costs $ 8,407,840 Sch. H
Fixed Price
BM2017-003 HHSO100201600036A Wayne Enterprises Bruce Wayne $ 2,500,000 $ 500,000 FFP
371 Bat Lane (563)875-9276
Gotham City, NJ 38747
Total Fixed Price Subcontractor Costs $ 500,000 Sch. H
Total Subcontract Costs $ 8,907,840 Sch. H
Commercial
BM2017-004 HHSO100201600038C Sanctum Sanctorum Stephen Strange, MD, PHD $ 4,000,000 2,750,000 FFP
76 Ancient One Road (563)875-9890
Greenwich Village, NYC

Sch. K

Big Money – Federal Segment
Schedule K
Summary of Hours and Amount on Time & Materials Contracts
Contract Number: HHSO100201700036B
Fiscal Year Ended 12/31/2017
Contract Labor Category Rate Hours Amount
Scientist I $160.00 27,000 $ 4,320,000
Scientist II $180.00 23,000 $ 4,140,000
Clinical Project Manager I $200.00 22,500 $ 4,500,000
Clinical Project Manager II $220.00 24,000 $ 5,280,000
Clinical Project Associate I $120.00 19,500 $ 2,340,000
Clinical Project Associate II $140.00 18,750 $ 2,625,000
Director $300.00 17,000 $ 5,100,000
$ 28,305,000
Other Direct Costs
Travel 185,000 Sch. H
Material 4,000,000 Sch. H
Subcontractors 2,907,840 Sch. H
Other Direct Costs 3,140,000 Sch. H
Subtotal $ 10,232,840
G&A Rate 9.12% Sch. A
G&A Applied to Othe Direct Costs $ 932,988
Total Claimed ODC Amount $ 11,165,828
Grand Total $ 39,470,828 Sch. I

Sch. L

Big Money – Federal Segment
Schedule L
Reconciliation of Total Payroll to Total Labor Distribution
Fiscal Year Ended 12/31/2017
Labor Distribution:
Direct Labor $ 32,600,000 Sch. H
Overhead Labor $ 9,500,000 Sch. C
G&A Indirect Labor $ 1,500,000 Sch. B
B&P Labor $ 300,000 Sch. B
IR&D Labor $ 100,000 Sch. B
Fringe Benefit Base $ 44,000,000
Paid Leave (Paid Time Off) $ 2,200,000 Sch. D
Total Labor Distribution $ 46,200,000
Adjustments
Restricted Stock Non-Recorded in GL $ 750,000
401K Contributions (Employee) $ (450,000)
Increase in Vacation Accrual Recorded in GL $ (25,000)
Adjusted Total $ 46,475,000
Total 941s:
1st Quarter $ 9,800,540
2nd Quarter $ 10,300,500
3rd Quarter $ 10,500,300
4th Quarter $ 10,873,660
Total 941s 41,475,000
Variance $ 5,000,000

Sch. M

Big Money – Federal Segment
Schedule M
Listing of Decisions, Agreements or Approvals
Accounting or Organizational Changes
Fiscal Year Ended 12/31/2017
A. Decisions/Agreements or Approvals
None
B. Accounting or Organization Changes.
None

Sch. N

Big Money – Federal Segment
Schedule N
Certificate of Final Indirect Costs
Fiscal Year Ended 12/31/2017
This is to certify that I have reviewed this proposal to establish final indirect cost rates
and to the best of my knowledge and belief:
1. All costs included in this Incurred Cost Submission proposal dated June 30, 2018,
to establish final indirect cost rates for Calendar Year Ended December 31, 2017,
are allowable in accordance with the cost principles of the Federal Acquisition
Regulation (FAR) and its supplements applicable to the contracts to which the final
indirect cost rates will apply; and
2. This proposal does not include any costs which are expressly unallowable under
applicable cost principles of the FAR or its supplements.
Firm:
Signature:
Name of Certifying Official:
Title:
Date of Execution:
NOTE: The Certificate of Final Indirect Costs is contained in FAR 52.242-4.

Sch. O

Big Money – Federal Segment
Schedule O
Schedule of Contract Closing Information For Those Contracts For Which
Work Effort Was Completed During the Fiscal Year Ended 12/31/2017
Level of Effort Cummulative Hours
Performance Period
Contract Number Order No. From To Ready to Close Contract Ceiling Amount Contract Fee Required Actual Notes
None N/A N/A N/A N/A N/A N/A N/A N/A N/A

Supp. Sch B

Big Money – Federal Segment
Supplemental Schedule B
Executive Compensation Information, Federal Segment
Fiscal Year Ended 12/31/2017
Executive Position G&A or Overhead Base Salary Bonus Other Compensation Total Compensation Voluntary Deletions Claimed Compensation Medicare Tax Directly Associated with Unallowable Compensation (1.45%)
President, Federal Segment G&A $ 486,450 $ 80,000 $ – 0 $ 566,450 $ (79,450) $ 487,000 $ (1,152)
Senior Federal Director, Human Resources G&A $ 461,200 $ 40,000 $ – 0 $ 501,200 $ (14,200) $ 487,000 $ (206)
Senior Federal Director, Business Development G&A $ 459,600 $ 45,000 $ – 0 $ 504,600 $ (17,600) $ 487,000 $ (255)
Senior Director, Lab Operations OH $ 451,250 $ 60,000 $ – 0 $ 511,250 $ (24,250) $ 487,000 $ (352)
Senior Director, Pharmeceutical Operations OH $ 449,100 $ 54,500 $ – 0 $ 503,600 $ (16,600) $ 487,000 $ (241)
Total Unallowable G&A $ (111,250) $ (1,613)
Schedule B
Total Unallowable OH $ (40,850) $ (592)
Schedule C
Total Voluntarily Deleted $ (152,100) $ (2,205)
Schedule D
Note: Amounts in excess of compensation limit relate to bonus payments.

ICP Checklist

CHECKLIST FOR DETERMINING
ADEQUACY OF CONTRACTOR INCURRED COST PROPOSAL
.Instructions: Auditors should complete this form for each incurred cost proposal submission and maintained a copy in the permanent file. Adequacy assessments of contractor incurred cost proposals include an assessment for completeness and accuracy of the submission, so the audit team can determine if the submission is auditable. Auditors are expected to use professional judgment in determining whether any specific missing/inadequate data or combination of missing/inadequate data is sufficient enough to warrant the submission as inadequate. The reviewer should consider the requirements of FAR 52.216-7(d) and the guidance in CAM 6-707.1 and 6-711.3b(1) when determining whether or not the submission is adequate. In making the assessment, the reviewer should determine if the proposal includes the required schedules and meets the requirements outlined in this checklist. In addition, the reviewer needs to ensure that math calculations and formulas used in each schedule are accurate. If the contractor generates internal reports identifying the required information in lieu of the example schedule, the reviewer should reference the contractor report on this form where the applicable schedule is listed.
A. GENERAL INFORMATION
Assignment Number                                                                                                                                       
Contractor/Segment Name
Fiscal Year Ending
Adequacy Determination
Proposal Received By Date Adequate
Proposal Evaluated By Date Inadequate*
Supervisory Approval Date Date Returned
B. INSTRUCTIONS BEFORE ASSESSING PROPOSAL ADEQUACY
Determine if the contractor is the prime on at least one government flexibly-priced contract. If yes, determine if all claimed prime contract costs are for Non-DoD agency contracts. If the contractor does not have a DoD contract, contact the Non-DoD agency to determine need for the incurred cost audit.
If all claimed costs are for subcontracts, contact the cognizant DCAA office(s) of the upper-tier contractor to determine the need for assist audit(s).
Coordinate with Field Detachment if the schedules contain any classified contract(s) and/or subcontract(s); mutual agreement regarding the completeness and accuracy of the incurred cost proposal should occur before accepting the proposal as adequate.
Determine if the contractor is using a blending of compensation caps approach to account for compensation costs in accordance with FAR 31.205-6(p). If using a blending approach, the audit team should contact the Administrative Contracting Officer (ACO) to notify them that the submission includes a blending approach. In some cases, the audit team may already be engaged with the ACO on working to execute an advance agreement, but if not, the audit team should notify the ACO that an advance agreement is needed in accordance with the DDP Memorandum, “Use of Blended Rates to Implement Multiple Compensation Caps” (October 25,
CHECKLIST FOR DETERMINING
ADEQUACY OF CONTRACTOR INCURRED COST PROPOSAL
2014). The audit team should offer to support the ACO’s execution of an advance agreement by performing a non-audit service under activity code 23600 (discussed in detail in MRD 16-PSP-005(R)). The audit team will still perform the adequacy assessment.
Sch Final Indirect Cost Rate Proposal Received Y/N/NA Adequate Y/N Comments
A Summary of All Claimed Indirect Expense Rates, Including Pool, Base, and Calculated Indirect Rate.
1. Did the contractor identify all claimed pools, bases, and rates, including COM (if applicable)?
2. Did the contractor provide a cost schedule for each final indirect pool claimed on Schedule A (Schedules Band C)?
3. Did the contractor provide a cost schedule for each intermediate cost pool claimed on Schedule A (Schedule D)?
4. Do total pool amounts from Schedule A tie to the total claimed expenses on Schedules Band C?
5. Do base amounts from Schedule A for intermediate cost pools tie to the base amounts on Schedule D?
6. Do base amounts from Schedule A for final pools tie to the base amounts on Schedule E?
B General & Administrative (G&A) Expenses (Final Indirect Cost Pool)
7. Do total G&A pool costs tie to Schedule H?
8. Did the contractor include explanatory notes for any amounts contained in an adjustment column or amounts omitted from the claim?
9. Do the intermediate allocations appear on source schedules (e.g., Schedule Bintermediate allocation amounts to Schedule D allocations)?
10. Was the applicable fringe and overheads applied to the IR&D/B&P?
C Overhead Expenses (Final Indirect Cost Pool)
11. Do total OH pool costs for each pool tie to Schedule H?
CHECKLIST FOR DETERMINING
ADEQUACY OF CONTRACTOR INCURRED COST PROPOSAL
Sch Final Indirect Cost Rate Proposal Received Y/N/NA Adequate Y/N Comments
12. Did the contractor include explanatory notes for any amounts contained in an adjustment column or amounts omitted from the claim?
13. Do the intermediate allocations appear on source schedules (e.g., Schedule C intermediate allocation amounts to Schedule D allocations)?
D Occupancy Expenses (Intermediate Indirect Cost Pool(s))
14. Did the contractor include explanatory notes for any amounts contained in an adjustment column or amounts omitted from the claim?
15. Do the intermediate allocations appear on source schedules (e.g., Schedule D intermediate allocations to Schedule B allocation amounts)?
16. Does the schedule identify (1) the allocation base by recipient, (2) the percentage of the total base for each recipient, and (3) the dollars allocated to each recipient?
E Claimed Allocation Bases by Element of Cost, Used to Distribute Indirect Costs
17. Does the schedule include an explanation of each base?
18. Do base amounts show individual cost elements that tie with costs on referenced schedules and include explanatory notes (e.g., direct cost elements in bases tie to Schedule H totals)?
F Facilities Capital Cost of Money Factors Computation
19. Do the allocation bases used match corresponding allocation bases claimed in Schedule A?
20. Did the contractor calculate a separate COM rate (if applicable) for each final indirect pool?
G Reconciliation of Books of Account and Claimed Direct Costs by Major Costs Element
CHECKLIST FOR DETERMINING
ADEQUACY OF CONTRACTOR INCURRED COST PROPOSAL
Sch Final Indirect Cost Rate Proposal Received Y/N/NA Adequate Y/N Comments
21. Do the direct cost amount per general ledger column tie to Schedule H?
22. Did the contractor include explanatory notes for any amounts contained in an adjustment column or amounts omitted from the claim?
H Schedule of Direct Costs by Contract and Subcontract and Indirect Expense Applied at Claimed Rates as well as a Subsidiary Schedule of Government Participation Percentages in Each of the Allocation Base Amounts.
23. Are the flexibly priced contracts and subcontracts, including commercial T&M, listed by contract and subtotaled by contract type? (Note: FFP and other commercial contracts may be shown on one summary line each)
24. Do subcontract costs incurred/claimed by contract tie to Schedule J?
25. Is the cost detail at the same level required by each contract, as specified in the billing instructions per thecontract clause, andlikely also usedfor billing purposes (e.g., by delivery order, taskorder, contract line item(CLIN), etc.)?
26. Were indirect expenses calculated using claimed rates from Schedule A?
27. Is the Government participation calculated for each indirect expense pool?
28. Do base amounts used for calculating Government participation tie to Schedules E and H?
I Schedule of Cumulative Direct and Indirect Costs Claimed and Billed by Contract and Subcontract
29. Is the cost detail in the same level used for billing costs (e.g., by delivery order)?
30. Do FY claimed dollars tie to Schedule H for cost type contracts?
31. Do FY claimed dollars tie to Schedule K (not Sch. H) for T&M contracts?
CHECKLIST FOR DETERMINING
ADEQUACY OF CONTRACTOR INCURRED COST PROPOSAL
Sch Final Indirect Cost Rate Proposal Received Y/N/NA Adequate Y/N Comments
32. Are prior years settled total costs the same as the prior year’s Cumulative Allowable Cost Worksheet?
33. Are contracts identified as physically complete reported on Schedule O?
J Subcontract Information
34. Does the schedule include all types of subcontracts (e.g., cost-type, T&M/LH, IDIQ with a variable element, and FFP) and inter- company costs claimed by the contractor on
flexibly priced prime contracts and/or upper-tier subcontracts?
35. Did the contractor include all of the detail for the subcontracts (e.g., subcontract number, prime contract number, subcontractor’s name and address, point of contact, subcontract value, costs incurred in the FY, and award type)?
K Summary of Each Time-and-Materials and / Labor Hour Contracts Information, Including Labor Categories, Labor Rates, Hours, and
Amounts; Direct Materials; Other Direct Costs; and, Indirect Expense Applied at Claimed Rates
36. Is the cost detail in the same level used for billing costs (e.g., by delivery order)?
37. Are all the contracts/delivery orders identified as T&M/LH on Schedule H reported on Schedule K?
38. Is the information presented by cost element,
with labor presented by labor category, showing contract labor rates (not actual rates and billed labor hours)?
39. Does the claimed indirect rate tie to Schedule A?
40. Does direct material and ODC claimed in Schedule K for each contract/delivery order tie to direct material and ODC claimed in Schedule H?
L Reconciliation of Total Payroll per IRS Form 941 to Total Labor Costs Distribution
CHECKLIST FOR DETERMINING
ADEQUACY OF CONTRACTOR INCURRED COST PROPOSAL
Sch Final Indirect Cost Rate Proposal Received Y/N/NA Adequate Y/N Comments
41. Do direct labor totals tie to totals on Schedule H?
42. Do G&A labor totals tie to totals on Schedule B?
43. Do other indirect pool labor totals tie to applicable pool schedules?
M List of Decisions, Agreements, Approvals, and Description of Accounting/Organizational Changes (e.g., Advance Agreement for Blended Rates).
44. Did the contractor provide a negative response if this schedule was not completed?
N Certificate of Final Indirect Costs
45. Is the certificate signed by an individual of the contractor’s organization at a level no lower than a vice president or chief financial officer of the business segment of the contractor that submits the proposal? (FAR 52.242-4(a)(3))
O Contract Closing Information for Contracts Physically Completed in this Fiscal Year
46. Are contracts reported here identified as physically complete, already closed or ready to close on Schedule I?
47. Does the schedule contain Level of Effort (LOE) information (LOE and actual hours), contract fee computations, period of performance, and contract ceiling amounts?
Overall Determination
Is the contractor’s incurred cost proposal adequate for audit?*
*If the overall determination is found to be inadequate for audit, provide rationale and support for your determination.
If the proposal is determined adequate, but the contractor is using a blending of compensation caps approach and there is no executed advance agreement, return the proposal to the contractor due to lack of an advance agreement and notify the contractor to resubmit the proposal only after executing an advance agreement with the ACO.
CHECKLIST FOR DETERMINING
ADEQUACY OF CONTRACTOR INCURRED COST PROPOSAL
If the proposal is incomplete, but determined adequate, contact the contractor to have them provide the necessary information to facilitate a timely audit.
If it is determined that the submission is inadequate, the auditor must provide a written description of any inadequacies to the contractor and contracting officer in accordance with FAR 42.705-1(b)(1)(iii). If the
information needed is not provided in a timely manner, the FAO should request ACO assistance. Maintain any correspondence with the contractor and ACO regarding requests for the incurred cost proposal and requests for additional information with this form. If the contractor is using a blending of compensation caps approach and there is no executed advance agreement, the inadequacy letter should include the statement, “The proposal includes a blending approach of compensation caps without an advance agreement. An advance agreement is required when a blending approach is used; therefore, the submission should not be resubmitted until such advance agreement is signed.”
C. AUDIT LEADS
List any audit leads or other significant risk identified during the proposal adequacy evaluation (e.g., any known business system deficiencies that have a significant impact on the final indirect rate proposal for this FY, significant risk identified by the contracting officer, math errors, incorrect rates were used on schedules, etc.)
Audit Lead Reference
D. CORRESPONDENCE
The contractor should be notified in writing of the need for additional information with a copy to the ACO. If the needed information is not provided in a timely manner, the FAO should request ACO assistance.
Date of Request Information Requested Date Information Received
Note: Attach any correspondence with the contractor regarding requests for the incurred cost proposal, requests for additional information if the proposal is not complete, and/or returning an inadequate proposal.

Rate Model —>

Fringe

Big Money – Federal Segment
Fringe Expense Pool & Base
12/31/17
Fringe Expense Pool:
Account # Account Name Trial Balance Adjustments Unallowable Ending Balance
600 – 001 Paid Leave (Paid Time Off) 2,200,000 – 0 – 0 2,200,000
600 – 002 Payroll Taxes 1,200,000 – 0 (2,205) 1,197,795
600 – 003 401K 750,000 – 0 – 0 750,000
600 – 004 Health Insurance 2,500,000 – 0 – 0 2,500,000
600 – 005 Life Insurance 750,000 – 0 – 0 750,000
600 – 006 Accidental Death & Dismembermant Insurance 720,000 – 0 – 0 720,000
600 – 007 Long Term Disability 900,000 – 0 – 0 900,000
600 – 008 Short Term Disability 600,000 – 0 – 0 600,000
600 – 009 Relocation Costs 150,000 – 0 – 0 150,000
600 – 010 Other Fringe Expenses 1,500,000 – 0 – 0 1,500,000
Total Fringe Pool 11,267,795
Fringe Allocation Base (Total Labor):
Account # Account Name Trial Balance Adjustments Unallowable Ending Balance
500 – 001 Direct Labor 32,600,000 – 0 – 0 32,600,000
700 – 001 Overhead Labor 9,500,000 – 0 – 0 9,500,000
800 – 001 G&A Indirect Labor 1,500,000 – 0 – 0 1,500,000
850 – 001 B&P Labor 300,000 – 0 – 0 300,000
875 – 001 IR&D Labor 100,000 – 0 – 0 100,000
Total Fringe Base 44,000,000
Fringe Rate 25.61%
Fringe Allocation Split Check
Direct Labor 8,348,411.42
Overhead Labor 2,432,819
G&A Indirect Labor 384,129.36
B&P Labor 76,826
IR&D Labor 25,609
Total Allocation 11,267,795 – 0

Facilities

Big Money – Federal Segment
Facilities Expense Pool & Base
12/31/17
Facilities Expense Pool:
Account # Account Name Trial Balance Adjustments Unallowable Ending Balance
650 – 001 Office Equipment & Furniture Rental 75,000 – 0 – 0 75,000
650 – 002 Maintenance 500,000 – 0 – 0 500,000
650 – 003 Leases 75,000 – 0 – 0 75,000
650 – 004 Utilities 5,000 – 0 – 0 5,000
650 – 005 Property Management Fees 10,000 – 0 – 0 10,000
650 – 006 Property Taxes 160,000 – 0 – 0 160,000
650 – 007 Security 140,000 – 0 – 0 140,000
Total Facilities Pool 965,000
Facilities Allocation Base (Square Footage):
Department Square Footage Allocation % Allocated Amount
Overhead 24,250 72% 698,545 Tab – Overhead
G&A 9,250 28% 266,455 Tab – G&A
Total Facilities Base 33,500

Overhead

Big Money – Federal Segment
Overhead Expense Pool & Base
12/31/17
Overhead Expense Pool:
Account # Account Name Trial Balance Adjustments Unallowable Ending Balance
700 – 001 Overhead Labor 9,500,000 – 0 – 0 9,500,000
700 – 002 Depreciation & Amortization 1,000,000 – 0 – 0 1,000,000
700 – 003 Material and Supplies 750,000 – 0 – 0 750,000
700 – 004 Shipping 3,000 – 0 – 0 3,000
700 – 005 Travel 1,200,000 – 0 (96,000) 1,104,000
700 – 006 Travel in Excess of Per Diem 50,000 – 0 (50,000) – 0
700 – 007 Entertainment 20,000 – 0 (20,000) – 0
700 – 008 Conferences 8,000 – 0 (400) 7,600
700 – 009 Severance Pay (for Direct Employees) 20,000 – 0 – 0 20,000
700 – 010 Bonus 250,000 – 0 (40,850) 209,150
700 – 011 Consultant Fees 500,000 – 0 (15,000) 485,000
Allocation Allocated Fringe – 0 2,432,819 – 0 2,432,819 Tab – Fringe
Allocation Allocated Facilities – 0 698,545 – 0 698,545 Tab – Facilities
Total Overhead Pool 16,210,114
Overhead Allocation Base (Direct Labor + Fringe):
Account # Account Name Trial Balance Adjustments Unallowable Ending Balance
500 – 001 Direct Labor 32,600,000 – 0 – 0 32,600,000
850 – 001 B&P Labor 300,000 – 0 – 0 300,000
875 – 001 IR&D Labor 100,000 – 0 – 0 100,000
Allocation Allocated Fringe – 0 8,450,846 – 0 8,450,846 Tab – Fringe
Total Overhead Base 41,450,846
Overhead Rate 39.11%

G&A

Big Money – Federal Segment
G&A Expense Pool & Base
12/31/17
Overhead Expense Pool:
Account # Account Name Trial Balance Adjustments Unallowable Ending Balance
800 – 001 G&A Indirect Labor 1,500,000 – 0 – 0 1,500,000
800 – 002 Accounting Fees 250,000 – 0 – 0 250,000
800 – 003 Depreciation & Amortization 300,000 – 0 – 0 300,000
800 – 004 Directors Fees & Expenses 250,000 – 0 – 0 250,000
800 – 005 Recruiting 350,000 – 0 – 0 350,000
800 – 006 Office Equipment & Furniture Rental 50,000 – 0 – 0 50,000
800 – 007 Severance Pay (for Indirect Employees) 15,000 – 0 – 0 15,000
800 – 008 Legal Fees – General 200,000 – 0 – 0 200,000
800 – 009 Material and Supplies 150,000 – 0 – 0 150,000
800 – 010 Bonus 150,000 – 0 (111,250) 38,750
800 – 011 Stockholders Expenses 200,000 – 0 – 0 200,000
800 – 012 Travel 300,000 – 0 (24,000) 276,000
800 – 013 Travel in Excess of Per Diem 35,000 – 0 (35,000) – 0
800 – 014 Entertainment 15,000 – 0 (15,000) – 0
850 – 001 B&P Labor 300,000 – 0 – 0 300,000
850 – 002 B&P Non-Labor Expense 150,000 – 0 – 0 150,000
875 – 001 IR&D Labor 100,000 – 0 – 0 100,000
875 – 002 IR&D Non-Labor Expense 50,000 – 0 – 0 50,000
Allocation Allocated Fringe on G&A Indirect Labor – 0 384,129 – 0 384,129 Tab – Fringe
Allocation Allocated Fringe on B&P Labor – 0 76,826 – 0 76,826 Tab – Fringe
Allocation Allocated Fringe on IR&D Labor – 0 25,609 – 0 25,609 Tab – Fringe
Allocation Allocated Overhead on B&P Labor – 0 147,365 – 0 147,365 Tab – Overhead
Allocation Allocated Overhead on IR&D Labor – 0 49,122 – 0 49,122 Tab – Overhead
Allocation Allocated Facilities – 0 266,455 – 0 266,455 Tab – Facilities
Allocation Allocated Home Office Human Resources – 0 571,875 – 0 571,875 Tab – Home Office
Allocation Allocated Home Office Residual Expense – 0 2,383,328 – 0 2,383,328 Tab – Home Office
Total G&A Pool 8,084,458
G&A Allocation Base (Total Cost Input):
Account # Balance Adjustments Ending Balance
Direct Labor 32,600,000 – 0 32,600,000 Tab – Overhead
Fringe on Direct Labor 8,348,411 – 0 8,348,411 Tab – Fringe
Direct ODC 8,155,880 – 0 8,155,880 Tab – Trial Balance
Direct Material 11,000,000 – 0 11,000,000 Tab – Trial Balance
Direct Travel 282,500 – 0 282,500 Tab – Trial Balance
Direct Subcontractors 11,657,840 – 0 11,657,840 Tab – Trial Balance
Total Overhead Pool (Including Allocations) 16,210,114 – 0 16,210,114 Tab – Overhead
Unallowable Overhead 222,250 – 0 222,250 Tab – Overhead
Unallowable Fringe 2,205 – 0 2,205 Tab – Fringe
Less: Overhead Allocated to B&P and IR&D (196,486)
Total G&A Base 88,282,715
G&A Rate 9.16%

Home Office

Big Money – Federal Division
Home Office Expense Allocations
12/31/17
Home Office Human Resources Allocation: Residual Home Office Expense Allocation:
Home Office Human Resources Pool 1,200,000 Home Office Residual Expense Pool 4,500,000
Allocation Base (Headcount): Allocation Base (Three Factor Formula):
Segment Headcount Allocation % Allocated Amount Segment Revenue Assets NBV Payroll (Labor) Avg %
Federal Segment Headcount 122 48% 571,875 Tab – G&A Federal Segment 110,000,000 56% 1,566,720 49% 44,000,000 54% 53%
Commercial Logistics Segment Headcount 75 29% 351,563 Commercial Logistics Segment 47,142,857 24% 843,619 26% 21,753,846 27% 26%
Research Services Segment Headcount 59 23% 276,563 Research Services Segment 40,123,127 20% 801,617 25% 15,205,200 19% 21%
Total Headcount 256 1,200,000 Total 197,265,984 100% 3,211,956 100% 80,959,046 100% 100%
Residual Allocation Split:
Federal Segment 53% 2,383,328 Tab – G&A
Commercial Logistics Segment 26% 1,155,499
Research Services Segment 21% 961,174
Total 4,500,000

Bases

Big Money – Federal Divison
Allocation Bases
12/31/17
Fringe Benefits (Total Labor)
500 – 001 Direct Labor
700 – 001 Overhead Labor
800 – 001 G&A Indirect Labor
850 – 001 B&P Labor
875 – 001 IR&D Labor
0 – 0
0 – 0 0.00%
Federal OH
0 – 0
0 Overhead Rate
0 – 0
0 – 0
– 0
0.00%
General & Administrative (Total Cost Input Excluding G&A expenses)
Federal Direct Labor – 0
Federal Labor Fringe – 0
Federal O/H – 0
ODCs – 0
Less: Cust. Site O/H Associated with B&P – 0
Total G&A Base – 0 0.00%
Total G&A Cost – 0
HO & U/A Adjustment – 0
Total Cost – 0

Unallowable Summary

Rate Proof

PSR Contract 1

Contract #1
Project Status Reports
12/31/09
Direct Labor
Direct Labor Customer Site 12,000,000
Direct Labor Corporate Site – 0
Total Direct Labor 12,000,000
Other Direct Costs
Materials 4,000,000
Subcontractrors 2,000,000
ODCs 2,000,000
Total Non-Labor Direct Costs 8,000,000
Total Direct Costs 20,000,000

PSR Contract 2

Contract #2
Project Status Reports
12/31/09
Direct Labor
Direct Labor Customer Site 2,000,000
Direct Labor Corporate Site 1,500,000
Total Direct Labor 3,500,000
Other Direct Costs
Materials 150,000
Subcontractrors – 0
ODCs 750,000
Total Non-Labor Direct Costs 900,000
Total Direct Costs 4,400,000

PSR Contract 3

Contract #3
Project Status Reports
12/31/09
Direct Labor
Direct Labor Customer Site 2,500,000
Direct Labor Corporate Site – 0
Total Direct Labor 2,500,000
Other Direct Costs
Materials 250,000
Subcontractrors – 0
ODCs 200,000
Total Non-Labor Direct Costs 450,000
Total Direct Costs 2,950,000

Labor Hours Contract 3

Contract #3
Labor Hours Summary
12/31/09
Labor Category Hours Rate Cost
Guard 15,000 75.00 $ 1,125,000
Senior Guard 7,000 100.00 700,000
Admin 680 25.00 17,000
Supervisor 1,200 150.00 180,000
Guard 20,000 78.75 1,575,000
Senior Guard 9,000 105.00 945,000
Admin 1,000 26.25 26,250
Supervisor 1,500 157.50 236,250
Total Direct Labor 55,380 4,804,500
Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more