Government Resources provided by Beason & Nalley an accounting firm providing government contractor consulting, outsourced accounting and financial services

Beason & Nalley Services, with a commitment to quality and added value for our clients

Government Resources

What is a Financial Capability Review?

The Preaward Survey is an inquiry into the ability of a prospective contractor to perform a proposed contract. These surveys can cover technical, production, quality assurance, financial capability, accounting systems and other aspects. Generally, they are divided into two categories:

the Financial Capability Review and
a Survey of the Prospective Accounting System.

The Financial Capability Review determines whether the contractor's finances are adequate to perform the contract. "The contracting officer shall obtain the type and depth of financial and other information that is required to establish a contractor's financial capability or disclose a contractor's financial condition." DFARS 232.072-2

The type of financial information reviewed by DCAA includes:

Financial statements, including those contained in reports issued to stockholders, lending institutions and SEC filings
Cash flow forecasts
Loan agreements and evidence showing compliance with these agreements
Aging of accounts receivable and payable and financial history of the contractor and affiliated concerns.

Normally, this data will be collected on a Preaward Survey of Prospective Contractor Financial Capability. Based on this information, the auditor will make a recommendation to the contracting officer regarding whether or not a contractor has enough financial resources to perform the contract.

For more information on the Financial Capability Review and Preaward surveys, see the Contractors Preaward Survey section (see Chapter 2) of the DCAA publication Information for Contractors.

Related Information:

BACK to Government Resources

Also see:
Why Choose Us | Industries | Contact Us

___________