Inquiry: In contracting and coming up with the bases for estimates, and taking into consideration competitiveness. What does a company need to be aware of when contracting out 1099 vs employees.
Response: When you develop your indirect rates, you should review the level of Fringe Benefits provided 1099 employees versus regular employees. You must ensure (to the best of your knowledge and ability) that according to.............
Even if a contract is not covered by the Cost Accounting Standards (CAS), the FAR will compel any contractor subject to these FAR principals to account for unallowable costs in accordance with CAS 405.
In essence, the government is saying that when FAR tells you that a specific Cost Accounting Standard, or some part of the CAS applies, then it applies, even though you may be exempt from CAS as a small business. It is what it is!
Although there are many types of Unallowable Costs, there are certain types that are Declared Expressly Unallowable by Federal statute or regulations. These type carry with them a higher incidence of fines, penalties, and interest if they are not excluded, or if they are included but not specifically identified, from billings, claims, proposals, or other types of data submitted to the government where the date could be used in decision making of any kind by the government.