GovCon Wednesday’s
Best Practices for Meeting DCAA Expectations
Estimated Read Time: 8 minutes
Submitting your Provisional Billing Rate (PBR) is a big milestone for any government contractor. But what happens after you hit “submit”? For many GovCons, the real challenge begins when auditors request support long after the initial PBR has been sent.
The Defense Contract Audit Agency (DCAA) doesn’t just want to see your numbers. They want to see the story behind them. And if that story doesn’t hold up under scrutiny, you risk having costs questioned, invoices delayed, or worse repayment demands that impact your bottom line.
This final installment of the VSINGH CPA 10-part series walks you through how to support your PBR with proper documentation and stay audit-ready year-round.
What Does It Mean to Support a PBR?
Supporting your Provisional Billing Rate means providing clear, accurate, and complete backup for every indirect rate you propose. Under FAR 42.704, this includes historical data, projections, and documentation that shows how you arrived at your estimates.
The most common forms of documentation include:
- Prior year incurred cost submissions
- Trial balance data and general ledger reports
- Fringe benefit cost allocations
- Overhead and G&A pool calculations
- Organizational charts and job cost records
- Headcount and labor distribution reports
Think of your PBR like a proposal and your documentation as the defense. If your rates are questioned during a DCAA audit or during incurred cost reconciliations, this backup becomes your first (and best) line of defense.
Why It Matters to GovCons
Being audit-ready isn’t just about compliance. It’s about:
✅ Protecting Your Cash Flow
When invoices are delayed due to missing or unclear PBR support, your working capital takes the hit. Small and mid-sized GovCons can’t afford multi-month delays in recovering costs they’ve already incurred.
✅ Reducing Audit Risk
DCAA audits are increasingly data-driven. If your support documentation doesn’t match the rates you billed or worse, can’t be located at all your costs may be questioned, and findings may be escalated.
✅ Building a Repeatable Process
Well-documented PBRs create consistency. They help you build a standard approach that can be refined each year. And when your indirect rate system is organized and transparent, it reflects maturity to both auditors and prime contractors.
How to Stay Audit-Ready Year-Round
Supporting your PBR isn’t a once-a-year task. It’s an ongoing process that should be integrated into your accounting and compliance systems. Here are a few best practices:
- Archive your working papers: Every Excel schedule, assumption, and cost driver used to calculate your PBR should be stored with your submission.
- Use Unanet, Costpoint, or other ERP systems to tag costs correctly: Accurate cost allocation is essential.
- Schedule internal reviews each quarter: Reconcile indirect pools and validate assumptions regularly.
- Document changes: If you revise rates mid-year, keep notes on why and how the update was calculated.
When you’re organized from day one, audit prep becomes a confirmation not a scramble.
What’s Next in the Series?
This concludes our 10-part series on mastering Provisional Billing Rates:
✅Part 1: Intro to PBR
✅Part 2: Do I Need a PBR? And How Do I Get One Approved?
✅Part 3: What Goes Into a PBR? Breaking Down the Numbers
✅Part 4: How Do I Calculate My Provisional Billing Rate?
✅Part 5: What Happens After I Submit My PBR?
✅Part 6: Common PBR Mistakes – And How to Avoid Them
✅Part 7: How PBRs Impact My Invoicing and Cash Flow
✅Part 8: Year End ICS
✅Part 9: Can I Update My PBR During the Year?
✅Part 10: Are You Audit-Ready? Supporting Your PBR with Documentation
Be proactive—not reactive.
If your team is preparing for a DCAA audit or reviewing past PBR submissions, now is the time to tighten your documentation strategy.
👉 Let VSINGH CPA help you establish audit-ready practices that protect your margins and keep your billing smooth. Contact us today.
👉 Check out our YouTube Shorts: https://youtube.com/shorts/jeqiofELdY8?si=V2j-Ikp2OVk5zyTf