{"id":138,"date":"2026-01-07T09:00:06","date_gmt":"2026-01-07T09:00:06","guid":{"rendered":"https:\/\/www.vsinghcpa.com\/blog\/?p=138"},"modified":"2026-04-14T18:43:23","modified_gmt":"2026-04-14T18:43:23","slug":"ics-essentials-2-who-must-submit-an-ics-contract-types-exemptions","status":"publish","type":"post","link":"https:\/\/www.vsinghcpa.com\/blog\/ics-essentials-2-who-must-submit-an-ics-contract-types-exemptions\/","title":{"rendered":"ICS Essentials #2: Who Must Submit an ICS? (Contract Types &#038; Exemptions)"},"content":{"rendered":"<p><em><strong>GovCon Wednesdays<\/strong><\/em><\/p>\n<p><em><strong>Estimated Read Time: 5 minutes<\/strong><\/em><\/p>\n<p>Not every contractor is required to file an Incurred Cost Submission but if your contracts include cost-reimbursable elements, the ICS becomes an annual compliance requirement under FAR 52.216-7.<br \/>\nUnderstanding whether your contract\u00a0<em>requires<\/em>\u00a0an ICS is essential for staying compliant and avoiding unilateral rate determinations from your ACO.<\/p>\n<p>This article explains exactly who must submit an ICS and which contracts are exempt.<\/p>\n<p>&nbsp;<\/p>\n<h2><strong>Core Concept: Who Must Submit an ICS?<\/strong><\/h2>\n<p>According to the ICS guidance, the requirement applies to primary contractors and subcontractors with flexibly priced contracts, including:<\/p>\n<h3><strong><span data-redactor-style-cache=\"font-size: 16px;\">1. Cost-Reimbursable Contracts<\/span><\/strong><\/h3>\n<p>These contracts directly reimburse allowable costs, making the ICS mandatory.<br \/>\nExamples: CPFF, CPIF, CPAF.<\/p>\n<h3><strong><span data-redactor-style-cache=\"font-size: 16px;\">2. Time &amp; Materials (T&amp;M) Contracts \u2014 if cost-reimbursable elements exist<\/span><\/strong><\/h3>\n<p>T&amp;M contracts trigger ICS when they include any of the following reimbursable cost components:<\/p>\n<ul>\n<li>Materials<\/li>\n<li>Labor<\/li>\n<li>Subcontractor costs<\/li>\n<li>Travel<\/li>\n<li>Relocation expenses<\/li>\n<\/ul>\n<p>All reimbursable charges must be supported with documentation such as invoices, timesheets, and receipts.<\/p>\n<h3><strong><span data-redactor-style-cache=\"font-size: 16px;\">3. Any Contract with FAR 52.216-7 (Allowable Cost &amp; Payment)<\/span><\/strong><\/h3>\n<p>If this clause is in your contract, ICS filing is required unless an exemption applies.<\/p>\n<p>&nbsp;<\/p>\n<h2><strong>Business Impact: Contract Exemptions<\/strong><\/h2>\n<p>Some contracts do not require an ICS. Based on your slide deck:<\/p>\n<h3><strong><span data-redactor-style-cache=\"font-size: 16px;\">1. Fixed-Price Contracts<\/span><\/strong><\/h3>\n<p>Fixed-price agreements with no provisions for indirect cost adjustments do not require an ICS.<br \/>\nEven if costs fluctuate, your price is fixed, no need for reconciliation.<\/p>\n<h3><strong><span data-redactor-style-cache=\"font-size: 16px;\">2. Commercial Item Contracts<\/span><\/strong><\/h3>\n<p>These are exempt under FAR 52.216-7(d)(2)(i).<br \/>\nIf the government buys a commercial product or service, ICS rules do not apply.<\/p>\n<h3><strong><span data-redactor-style-cache=\"font-size: 16px;\">3. Contracts with No Cost-Reimbursable Elements<\/span><\/strong><\/h3>\n<p>If a contract does not reimburse actuals (materials, travel, subcontractors, etc.), an ICS is not required.<\/p>\n<h3><strong><span data-redactor-style-cache=\"font-size: 16px;\">4. Contracts Awarded Prior to July 1, 2018 (When Certain Thresholds Don\u2019t Apply)<\/span><\/strong><\/h3>\n<p>Older negotiated contracts without cost\/pricing data requirements may be exempt depending on clauses and thresholds.<\/p>\n<h3><strong><span data-redactor-style-cache=\"font-size: 16px;\">5. Portions of Mixed Contracts<\/span><\/strong><\/h3>\n<p>If a contract has both fixed-price and cost-reimbursable portions:<\/p>\n<ul>\n<li>Only the reimbursable portion requires ICS.<\/li>\n<li>Examples:\n<ul>\n<li>Fixed-price deliverables + reimbursable labor hours<\/li>\n<li>Fixed-price base + reimbursable materials<\/li>\n<li>Fixed-price work + reimbursable travel costs<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>What Contractors Should Do<\/strong><\/h2>\n<p>To determine if you owe an ICS, review:<\/p>\n<p>\u2714 Contract type (Cost-type? T&amp;M? Mixed?)<br \/>\n\u2714 Whether FAR 52.216-7 is included<br \/>\n\u2714 Whether reimbursable elements exist<br \/>\n\u2714 Whether the contract involves commercial services<br \/>\n\u2714 Whether the contract is pre- or post-July 1, 2018<\/p>\n<p>Contractors should also:<\/p>\n<ul>\n<li>Maintain supporting documentation for all reimbursable costs<\/li>\n<li>Track timesheets, subcontractor invoices, travel receipts, and materials<\/li>\n<li>Keep a compliance checklist aligned with FAR Part 31 cost principles<\/li>\n<\/ul>\n<p>If your contract reimburses actual costs in any form, assume ICS applies unless confirmed otherwise.<\/p>\n<p>&nbsp;<\/p>\n<h2><strong>Key Takeaways<\/strong><\/h2>\n<ul>\n<li>ICS is required for flexibly priced contracts.<\/li>\n<li>Cost-reimbursable and certain T&amp;M contracts trigger ICS.<\/li>\n<li>Fixed-price and commercial item contracts are exempt.<\/li>\n<li>Mixed contracts require ICS for the reimbursable portion only.<\/li>\n<li>Contracts with FAR 52.216-7 almost always require an ICS.<\/li>\n<li>Proper documentation is essential for compliance.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Need Support Determining ICS Requirements?<\/strong><\/h2>\n<p>VSINGH CPA helps contractors review contract clauses, identify ICS obligations, and prepare fully compliant submissions, including support for mixed contracts and complex T&amp;M structures.<\/p>\n<p>\ud83d\udc49\u00a0<strong>Check out our YouTube Shorts<\/strong>\u00a0for quick GovCon Essentials:<\/p>\n<p><a href=\"https:\/\/youtube.com\/shorts\/nU7of5JyB4U\" target=\"_blank\" rel=\"noopener\">https:\/\/youtube.com\/shorts\/nU7of5JyB4U<\/a><\/p>\n<p>&nbsp;<\/p>\n<h1><strong>Coming Up in the GovCon ICS Essentials Series<\/strong><\/h1>\n<p>\u2705\u00a0<strong>ICS Essentials #1:<\/strong>\u00a0What Is an Incurred Cost Submission (ICS)?<br \/>\n\u2705\u00a0<strong>ICS Essentials #2:<\/strong>\u00a0Who Must Submit an ICS?<br \/>\n3\ufe0f\u20e3\u00a0<strong>ICS Essentials #3:<\/strong>\u00a0Thresholds &amp; Deadlines for ICS<br \/>\n4\ufe0f\u20e3\u00a0<strong>ICS Essentials #4:<\/strong>\u00a0ICS Requirements for Time &amp; Materials (T&amp;M) and Mixed Contracts<br \/>\n5\ufe0f\u20e3\u00a0<strong>ICS Essentials #5:<\/strong>\u00a0What\u2019s Included in an ICS? Breakdown of Required Schedules<br \/>\n6\ufe0f\u20e3\u00a0<strong>ICS Essentials #6:<\/strong>\u00a0Who Reviews ICS? DCAA, Agency Auditors &amp; GAO Oversight<br \/>\n7\ufe0f\u20e3\u00a0<strong>ICS Essentials #7:<\/strong>\u00a0Key FAR Clauses You Must Know for ICS Compliance<br \/>\n8\ufe0f\u20e3\u00a0<strong>ICS Essentials #8:<\/strong>\u00a0How to Prepare a Compliant ICS (Documentation &amp; Best Practices)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>GovCon Wednesdays Estimated Read Time: 5 minutes Not every contractor is required to file an Incurred Cost Submission but if your contracts include cost-reimbursable elements, the ICS becomes an annual compliance requirement under FAR 52.216-7. Understanding whether your contract\u00a0requires\u00a0an ICS is essential for staying compliant and avoiding unilateral rate determinations from your ACO. This article explains exactly who must submit an ICS and which contracts are exempt. &nbsp; Core Concept:&#8230; <a class=\"more-link\" href=\"https:\/\/www.vsinghcpa.com\/blog\/ics-essentials-2-who-must-submit-an-ics-contract-types-exemptions\/\">Read More<a><\/p>\n","protected":false},"author":2,"featured_media":221,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"ics-requirements contract-types govcon-compliance","_genesis_custom_post_class":"govcon-blog ics-series decision-post","_genesis_layout":"","footnotes":""},"categories":[6],"tags":[103,104,14,57,18,31,105,102,55,29],"class_list":{"0":"post-138","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-ics","8":"tag-contract-types","9":"tag-cost-reimbursable-contracts","10":"tag-dcaa-compliance","11":"tag-far-52-216-7","12":"tag-govcon-accounting","13":"tag-government-contracting","14":"tag-ics-exemptions","15":"tag-ics-requirements","16":"tag-incurred-cost-submission","17":"tag-tm-contracts","18":"entry","19":"govcon-blog ics-series decision-post"},"_links":{"self":[{"href":"https:\/\/www.vsinghcpa.com\/blog\/wp-json\/wp\/v2\/posts\/138","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vsinghcpa.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vsinghcpa.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vsinghcpa.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vsinghcpa.com\/blog\/wp-json\/wp\/v2\/comments?post=138"}],"version-history":[{"count":1,"href":"https:\/\/www.vsinghcpa.com\/blog\/wp-json\/wp\/v2\/posts\/138\/revisions"}],"predecessor-version":[{"id":139,"href":"https:\/\/www.vsinghcpa.com\/blog\/wp-json\/wp\/v2\/posts\/138\/revisions\/139"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vsinghcpa.com\/blog\/wp-json\/wp\/v2\/media\/221"}],"wp:attachment":[{"href":"https:\/\/www.vsinghcpa.com\/blog\/wp-json\/wp\/v2\/media?parent=138"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vsinghcpa.com\/blog\/wp-json\/wp\/v2\/categories?post=138"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vsinghcpa.com\/blog\/wp-json\/wp\/v2\/tags?post=138"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}