‍Landing a government contract can be a huge milestone for any business. But before the ink hits the paper, there’s one major hurdle to clear: the DCAA Pre-Award Survey. More than just red tape, it’s a serious evaluation that determines whether your company is ready to handle federal funds responsibly. And at the heart of it all? A DCAA-approved cost accounting system.  

In this post, we’re breaking down why a DCAA-approved system is so critical, what the Pre-Award Survey actually entails, and how to get yourself in top form to pass with flying colors.

Ready to get started? Let’s get to it.

Why a DCAA-Approved System Makes All the Difference

So, why is a DCAA-approved system so vital? Here’s the simple answer: it’s built to meet the exact standards the DCAA is checking for.

When the DCAA auditor comes knocking (or more likely, emailing), they’re not interested in how slick your interface looks or how fast your invoices go out. They want structure. Controls. Audit trails. Segregation of costs. Consistent timekeeping.  

In other words, they want to see that your accounting system is ready to play by federal rules — and a DCAA-approved system is specifically designed to do just that.

Think of it like showing up to a black-tie event. You wouldn’t wear flip-flops and hope no one notices, would you? You show up dressed for the occasion. A DCAA-approved cost accounting system is your accounting system dressed in a tux.

What Does the DCAA Look for in a Pre-Award Survey?

Here’s a quick look at some of the areas the DCAA will evaluate in the SF 1408:

• Segregation of direct and indirect costs
• Proper timekeeping system (employees must track time daily and accurately)
• Job cost accounting (each contract or job must have its own set of tracked costs)
• Ability to track and allocate indirect costs
• Consistent billing practices
• Compliance with Generally Accepted Accounting Principles (GAAP)

And that’s just the short version. Each of these areas requires system features, internal controls, and documentation procedures that align with government expectations.

If your system can’t provide clear, defensible answers for each of these points, your survey might not go the way you’d hoped.

Real-World Impact: Pass or Fail

Let’s not sugarcoat it: failing a pre-award survey is a deal-breaker. You might lose the contract opportunity altogether or be forced to scramble and fix your accounting system under pressure. Either way, it’s a high-stakes situation you don’t want to wing.

Companies that invest early in a DCAA-ready system, or that partner with consultants familiar with federal compliance, often end up miles ahead. Not only are they more likely to pass the survey, but they also gain long-term infrastructure for managing government contracts properly from day one.

Building or Upgrading to a DCAA-Approved System

If you’re just starting out or still running on off-the-shelf tools like QuickBooks, don’t panic — you’re not doomed. Many small and mid-sized businesses begin here, and it’s completely fine. To meet DCAA standards though, you’ll likely need to upgrade, customize, or integrate additional tools to get your accounting system in shape.

Here are some smart moves:

1. Invest in Specialized Software

If you’re serious about government contracting, you’ll want to invest in software that was built from the ground up with DCAA compliance in mind. Systems like WrkPlan come loaded with features that address DCAA’s core requirements, such as:

• Integrated timekeeping
• Job cost accounting
• Automated indirect cost allocation
• Project budgeting and reporting
• Audit-ready records and trails

These systems are designed to ensure your accounting process holds up under the microscope of a federal audit. Sure, the upfront cost might seem steep, but it’s far more cost-effective than losing a contract or trying to retrofit a basic system later on.

2. Focus on Timekeeping

Timekeeping is one of the biggest red flags in a DCAA audit — and one of the most common reasons companies fail the pre-award survey.  

DCAA has strict expectations here: employees must enter time daily, and the system must have clear audit trails and controls to prevent after-the-fact changes without proper approval.

If your team is still logging hours on spreadsheets (or worse, sending them in via email), it’s time to upgrade. DCAA-compliant systems enforce time entry rules, prevent backdating, and include manager approvals and digital signatures. These features are non-negotiable for compliance.

3. Document Everything

Here’s the golden rule of DCAA: if it’s not documented, it didn’t happen. Auditors don’t only want to see that your system can do something; they want to see proof that it’s actually being used properly, consistently, and by the book.

That means your company needs:

• Written accounting policies and procedures
• Timesheet compliance instructions for employees
• Training records to show your team understands the rules
• A manual or SOP for using your accounting system
• Regular internal audits or check-ins documented over time

A modern, DCAA-friendly system should support or integrate with tools that make documentation easy — whether that’s through built-in policy templates, cloud document storage, or audit logs you can export on demand.

4. Consult a Pro

DCAA compliance isn’t something most business owners just “figure out” on their own—and that’s okay. Getting help from a DCAA compliance consultant or a CPA with government contracting experience is one of the smartest investments you can make.

These experts can:

• Identify gaps between your current setup and DCAA standards
• Recommend specific software or configurations based on your size and contract type
• Help you prepare policies, documentation, and audit responses
• Train your team on timekeeping and cost segregation best practices
• Guide you through mock audits or SF 1408 prep

Even a short engagement with a knowledgeable consultant can mean the difference between passing your pre-award survey and getting sidelined by red flags you didn’t even know existed.

Compliance Is Ongoing — Not a One-and-Done

Even if you pass the pre-award survey, the work isn’t over. DCAA audits can happen at multiple stages of a contract’s lifecycle — billing audits, incurred cost submissions, and forward pricing rate audits are just a few examples. A compliant system isn’t about winning and keeping the contract.

A DCAA-approved system gives you a long-term edge. It’s like setting the table for every future opportunity, because once your system is proven and reliable, you can reuse it across proposals and contracts without reinventing the wheel every time.

It’s Time to Get Ahead with a DCAA-Approved Cost Accounting System

Don’t leave your government contract up to chance. With WrkPlan, you can confidently navigate the DCAA Pre-Award Survey and beyond. Our DCAA-compliant system is built specifically for government contractor to help manage timekeeping, cost segregation, job costing, and reporting with ease.

Whether you're bidding on your first federal contract or upgrading your system to meet new demands, WrkPlan keeps you compliant, audit-ready, and ahead of the curve.

Book a demo today and take the first step toward securing your next government contract with confidence.