{"id":55,"date":"2025-10-08T10:00:00","date_gmt":"2025-10-08T10:00:00","guid":{"rendered":"https:\/\/www.vsinghcpa.com\/blog\/?p=55"},"modified":"2026-04-14T17:45:10","modified_gmt":"2026-04-14T17:45:10","slug":"common-pbr-mistakes-and-how-to-avoid-them","status":"publish","type":"post","link":"https:\/\/www.vsinghcpa.com\/blog\/common-pbr-mistakes-and-how-to-avoid-them\/","title":{"rendered":"Common PBR Mistakes \u2014 And How to Avoid Them"},"content":{"rendered":"\r\n

GovCon Wednesday’s<\/p>\r\n\r\n\r\n\r\n

A Guide for GovCons Focused on DCAA Compliance
Estimated Read Time: 8 minutes<\/p>\r\n\r\n\r\n\r\n

Submitting your Provisional Billing Rate (PBR) isn\u2019t the final compliance hurdle\u2014it\u2019s just the beginning.<\/p>\r\n\r\n\r\n\r\n

Many government contractors make avoidable errors in their PBR submissions that lead to billing delays, audit complications, or even rejected invoices. These mistakes are often small like using outdated data or failing to document assumptions but they can have outsized impacts on cash flow and compliance.<\/p>\r\n\r\n\r\n\r\n

In this installment of our 10-part indirect rate strategy series, we highlight the most common PBR mistakes we see across the GovCon landscape and how your business can stay clear of them.<\/p>\r\n\r\n\r\n\r\n

1. Using Outdated or Inaccurate Cost Data<\/strong><\/p>\r\n\r\n\r\n\r\n

PBRs must reflect\u00a0current-year<\/em>\u00a0indirect cost projections. But some contractors rely on last year\u2019s data or apply flat percentage increases without analyzing current trends.<\/p>\r\n\r\n\r\n\r\n

\u27a1\ufe0f\u00a0Fix:\u00a0Update your cost pool estimates based on actuals from the current fiscal year (or the most recent six months), adjusted for known changes in staffing, leases, or other indirect drivers.<\/p>\r\n\r\n\r\n\r\n

2. Failing to Exclude Unallowable Costs<\/strong><\/p>\r\n\r\n\r\n\r\n

According to FAR 31 and 42.704, unallowable costs\u2014such as certain legal fees, advertising, or lobbying\u2014cannot be included in your rate base or pools. Submitting a PBR that includes these expenses could lead to disallowed costs during an audit.<\/p>\r\n\r\n\r\n\r\n

\u27a1\ufe0f\u00a0Fix:\u00a0Scrub your general ledger and cost pools thoroughly to ensure unallowable expenses are excluded and segregated.<\/p>\r\n\r\n\r\n\r\n

3. Missing Documentation for Assumptions<\/strong><\/p>\r\n\r\n\r\n\r\n

If you submit a billing rate without explaining how it was calculated or how future costs were estimated your auditor may question the submission or delay approval.<\/p>\r\n\r\n\r\n\r\n

\u27a1\ufe0f\u00a0Fix:\u00a0Include a narrative or spreadsheet showing your assumptions, cost build-up, and methodology. This shows transparency and readiness.<\/p>\r\n\r\n\r\n\r\n

4. Submitting Late (or Not at All)<\/strong><\/p>\r\n\r\n\r\n\r\n

FAR 42.704 requires contractors to submit provisional billing rates at the beginning of the fiscal year, or earlier if stated in the contract. Late submissions can trigger unnecessary oversight or delay payment cycles.<\/p>\r\n\r\n\r\n\r\n

\u27a1\ufe0f\u00a0Fix:\u00a0Build PBR submissions into your compliance calendar and assign internal deadlines well before the government\u2019s required date.<\/p>\r\n\r\n\r\n\r\n

5. Not Requesting Updates During the Year<\/strong><\/p>\r\n\r\n\r\n\r\n

Circumstances change indirect costs increase, staffing models shift, contracts expand. Yet many contractors fail to update their PBRs mid-year, leading to underbilling or overbilling.<\/p>\r\n\r\n\r\n\r\n

\u27a1\ufe0f\u00a0Fix:\u00a0If your projections are materially different from your original submission, contact your DCAA auditor or contracting officer to revise your rates. This is allowed under FAR 42.704(c) and helps align billing with reality.<\/p>\r\n\r\n\r\n\r\n

Why These Mistakes Matter<\/strong><\/p>\r\n\r\n\r\n\r\n

Mistakes in your PBR can damage more than your cash flow they can weaken your credibility with DCAA and future contracting officers. Here\u2019s how:<\/p>\r\n\r\n\r\n\r\n