Government contracting

A US defense manufacturer can win a cost-type contract only when its accounting system passes a pre-award survey (SF 1408). Carbon covers the items the survey checks on projects: each project's cost objective, unallowable cost kept apart, timekeeping with a full correction trail, labor reconciled to payroll, and contract line items funded by ACRN.

Everything on this page is included in every plan. The timekeeping controls stay off until you turn on DCAA mode, so a commercial company keeps the simple timesheet.

Cost objectivesCopy Anchor Link

Open a project's Settings page and set Cost Objective in the Accounting section. The field shows in DCAA mode, and on a Released project that has none:

A project with cost treatment Expense takes Indirect, IR&D or B&P only. In DCAA mode every project needs a cost objective, and you cannot turn DCAA mode on while a Released project has none.

Unallowable costCopy Anchor Link

FAR 31.201-6 requires you to identify unallowable cost and keep it out of what you bill. Carbon marks it in two places:

• The account. In the chart of accounts, set Allowability to Expressly Unallowable, Mutually Agreed Unallowable or Directly Associated Unallowable, and give an Unallowable reason (for example 31.205-14 Entertainment). Element of cost classifies the account as Labor, Material, Subcontract, Other Direct or Travel. Group accounts take none of these fields.
• The element. In DCAA mode, the properties of an element page have a Government contracting group. Turn on Unallowable there. The elements below it inherit it.

When a cost posts to an unallowable account or element, its project ledger row is marked unallowable. That row never becomes a billable item. The mark is kept at posting, so a later change to the account does not rewrite history.

The project's Costs page shows Allowable and Unallowable in separate columns, and the ledger has an Unallowable column you can filter on. Turn on Preproduction on an element to show its cost as Preproduction in the total row.

DCAA timekeepingCopy Anchor Link

Open Settings → Projects and turn on Use DCAA controls in the Government Contracting card. If the certification texts are empty, Carbon asks for both before it turns DCAA on. Turning it on is refused while a Released project has no cost objective; such a project shows Cost objective on its Settings page even while DCAA is off.

The switch also decides what you see. While it is off, Carbon hides the government contracting fields: cost objectives, allowability on the chart of accounts, the Allowable and Unallowable columns, CLINs, funding actions and the government reports.

The DCAA rules are on Settings → Time, which shows them only while DCAA is on.

In DCAA mode, My Time works like this:

• Daily entry. Time for a future date is refused, except on a leave element. A late entry asks for a Reason for late entry, and it shows on the late entries report.
• Correction trail. Changing saved time asks for a Reason for change. Every change keeps the hours before and after, who changed them, when and why. The history icon on a cell opens Changes.
• Certification. Submit week opens Certify and Submit: the employee ticks I certify this statement for the text that matches their FLSA status (set on the person's Job tab). Carbon stores who certified, when, and a hash of the text.
• Total time. With the timecard check on Block, a week whose entries are short of its time cards cannot be submitted. On Warn, the week is submitted with a warning.
• Log time saves a Draft entry. It is submitted with the week, after certification.

A manager opens an employee's week from Open timesheet on an approval card. Every change the manager makes needs a reason, and the entry becomes "Pending Employee Review". It cannot be submitted or posted until the employee accepts it with Accept changes on their timesheet. A manager can add time for an employee only on a day of recorded absence.

Charge restrictionsCopy Anchor Link

On a project's Settings page, turn on Restrict charging to members in the Charging section, then add the people under Members. In DCAA mode, time from anyone else is refused when it posts.

LeaveCopy Anchor Link

On a project with cost objective Indirect, turn on Leave for the element that holds vacation or sick time. Employees can enter time on it ahead of the day.

Dilution for exempt staffCopy Anchor Link

An exempt employee who works more than the standard weekly hours spreads the week's cost over all the hours worked (CAM 6-410.4a). In DCAA mode, the week posts at a factor of standard hours ÷ hours worked. For example, 50 hours at a 60.00 labor rate with a 40-hour standard post 2,400.00, at 48.00 an hour.

A later correction to the week posts the difference on its other entries.

Labor transfersCopy Anchor Link

Moving posted time to another charge number is a labor transfer. On My Time, open the row's menu and choose Correct for the posted day, turn on Move to another charge number, pick the new charge number and labor category, and give a reason.

In DCAA mode a transfer always waits for approval, even with timesheet approval off, and the person who asked for it cannot approve it. The approvals list marks it Transfer and shows the charge number it came from.

Payroll totalsCopy Anchor Link

Carbon has no payroll, so you import each pay period's totals to reconcile labor. Open People → Payroll Totals and import a CSV with the employee, period start, period end, gross wages and hours paid. Importing the same employee and period again replaces the totals. See import and export for the import steps.

Missing timeCopy Anchor Link

In DCAA mode Carbon checks yesterday every day. When a scheduled shift day has no time entered, and the day is not a holiday or a recorded absence, the employee and their manager get a notice with Open timesheet.

Only employees with Timesheet required on count, and only from their start date. Both are on the person's Job page. Timesheet required is on for every employee until you turn it off, for example for shop floor staff who never charge a project. The daily notice, the Missing Time report and the close checklist all follow it. A day counts only once it has ended.

The close checklist gains Timesheets complete, a warning. In DCAA mode it counts the period's entries that are not posted, plus its days with missing time.

CLIN and ACRN fundingCopy Anchor Link

A contract line can carry a contract line item number (DFARS 204.71). On the line, enter CLIN / SLIN: 4 digits for a CLIN (0001), or 2 more letters or digits for a SubCLIN (0001AA). Pick the Parent CLIN for a SubCLIN.

A Time & Materials or Cost Plus line has a Funding Actions grid on its billing page, one row per contract modification: Modification, Funded (the date), ACRN, Expires, Funded Cost and Funded Fee. Add Funding adds a row. In DCAA mode the line's funded cost and funded amount are the sums of its funding actions, and you edit the actions instead.

When a project billing invoice bills a numbered line, it shows a separate amount per CLIN, with how it splits across the line's ACRNs. Each CLIN draws on its oldest funds first.

Contract financingCopy Anchor Link

A fixed-price contract can carry progress payments or performance-based payments, never both. Open the contract's Financing tab. Contract financing is available on the Business plan, and it needs a contract in the company's base currency.

1. Financing Terms: the method, the contract price (SF 1443 line 5), the initial award date and the small-business flag. For performance-based payments, the maximum share of the price, at most 90 %.
2. Rates: the progress payment rate and the liquidation rate the contract clause sets. A modification adds a rate from its effective date. Carbon does not derive a rate from business size.
3. Payment Events (performance-based payments): each event's code, description, completion criteria, type, CLIN and amount. Complete records the completion date and the evidence. A Cumulative event bills only after every event before it is complete.

New Request creates a Draft:

• Progress payments: Carbon computes SF 1443 lines 5 to 26 from the cost of the contract's project and its Fixed lines' projects, through the costs-through date. Unallowable cost counts in line 12a, never in line 11. When the cost to date plus the estimate to complete exceeds the price, line 13 applies the loss ratio. Section III applies once an item is delivered and invoiced. On a Draft you can override lines 12b, 14a, 14b, 14d, 20a, 21a, 21d, 23 and 26, each with a reason; the request keeps the computed value beside it.
• Performance-based payments: the request bills every complete event that no earlier request billed, and shows the values 1a to 2. Its amount never reads cost.

Submit gives the request the next number of the contract's series; a withdrawn request keeps its number. Approve records the amount the contracting officer approved. Print gives the SF 1443 or the request to enter in WAWF.

Record Payment opens a customer payment held against the contract for the approved amount. Posting it marks the request Paid. A delivery invoice of the contract shows the liquidation the government will take, and the invoice stays gross. When the payment arrives, apply the contract's deposit to the invoice for the liquidation and the cash for the rest. The Financing tab shows the balance still unliquidated.

R&D taxCopy Anchor Link

Carbon tags the data a US research tax filing needs and reports it by tax year. A tax year starts in the month set as Start of Tax Year in the fiscal year settings, and it takes the name of the calendar year it starts in.

• Business components. In an element's Government contracting properties, turn on Business component (R&D), then pick its Component type (Product, Process or All Others) and, for software, its Software type. The element's cost and the cost of the elements below it belong to it, down to the next business component.
• Research role. Each labor category can have a Research role: Direct Research, Direct Supervision, Direct Support or Not Qualified. New time in the category takes that role.
• Work location. Each timesheet entry has a work location, by default the employee's job location. The location's country decides domestic or foreign research: the United States, Puerto Rico and the US possessions are domestic. On My Time, open Add row → More to log time at another location or with another role.
• Funded research. On a contract, the Research (R&D tax) group has Funded research, Payment depends on success and We keep substantial rights. With Funded research on Default, a contract with a Cost Plus or Time & Materials line counts as funded. Cost of a Direct project under a funded contract is not a qualified research expense.
• Officers. On a person's Job tab, turn on Officer for Form 6765 Section E.

The two R&D tax reports:

• §174A R&E lists each business component's cost in Domestic, Foreign and Unknown Country columns (a location with no country is unknown). Burden shows apart for review, and Of Which Funded shows the funded part.
• Form 6765 Section G lists the business components in descending order of qualified research expenses until they hold 80 % of the total or 50 rows, then one row for all the others. Wages use the employee's imported payroll totals, else their labor cost, and an employee with 80 % or more of their hours qualified counts all of their wages. Contract research counts at 65 % (column 56, Applicable Contract Research). Carbon applies 65 % to all contract research: adjust payments to a qualified research consortium (75 %) or for qualified energy research (100 %) yourself. All amounts are in whole dollars, and columns 53 and Total QRE add the rounded amounts. A Total row after the components sums every row; its columns 53 to 56 go to Section F lines 42 to 45. The file ends with the officers' wage total for Section E line 38 and notes for anything Carbon estimated or left out.

ReportsCopy Anchor Link

Open Projects → Reports and pick a report. Each one opens on its own page as a table, with Download CSV for the same rows. Each report runs for a date range, except labor distribution, which runs for one accounting period, and the R&D tax reports, which run for one tax year. Pin the reports you use most; pins are per person.

A report you do not have the permission for is not shown. In labor distribution, an employee with no imported payroll for the period shows "No payroll imported".

The Missing Time report has one row per employee, with the number of missing days, the first and the last, and the manager. Expand a row to see the days. Search, or filter by employee, manager, department or location. Select employees and choose Send Reminder to send each one a notice that lists their missing days. Exclude from Report in a row's menu turns the person's Timesheet required off, and Excluded lists those people so you can add them back; both need permission to update People.