The Incurred Cost Submission (ICS), also known as the ICE Report, is a critical compliance requirement for government contractors with cost-reimbursement contracts. With the June 30, 2025, ICS filing deadline quickly approaching, now is the time to double-check your data, documentation, and strategy. Here are the top things government contractors should keep in mind to file successfully and reduce audit risk.
1. Understand Who Must File
If you have any flexibly priced contracts (including cost-plus-fixed-fee), you’re likely required to file an ICE report. Even if you’re a small business, the obligation still applies if your contracts fall under FAR 52.216-7.
2. Use the Official DCAA ICE Model
The Defense Contract Audit Agency (DCAA) provides a downloadable ICE model Excel workbook that must be used for your submission. Always download the latest version directly from the DCAA website to ensure compliance.
3. Know the Submission Deadline
Your ICE report is due six months after the end of your fiscal year. For calendar-year contractors, that’s June 30, 2025. Missing this deadline can trigger audit findings or even payment withholdings.
4. Ensure Consistency Across Schedules
According to the ICE model, schedules “A through O” must reconcile with one another and with your accounting records. Any inconsistencies can raise red flags for the Defense Contract Audit Agency (DCAA).
5. Prepare Accurate Indirect Rates
Schedule H is one of the most scrutinized parts of the ICE submission. Be sure to calculate your actual indirect rates accurately and tie them to both claimed costs and billed rates.
6. Document Your Basis of Allocation
DCAA expects transparency. You’ll need to explain how you allocate indirect costs across contracts, departments, or cost centers. A clear basis of allocation reduces the chance of audit findings.
7. Back Up All Claimed Costs
Every claimed cost should be fully supported by your accounting system and available documentation. Expect DCAA to request timesheets, invoices, payroll records, and subcontractor agreements.
8. Check for Unallowable Costs
Ensure that you’ve removed or adjusted for unallowable costs as per FAR Part 31. Common examples include marketing expenses, interest, fines, and alcohol.
9. Maintain Adequate Internal Controls
A strong accounting system — one that segregates direct versus indirect costs, utilizes timesheets, and generates clean reports — is a requirement. ICE submissions rely on the integrity of these systems.
10. Don’t Go It Alone
Even seasoned contractors benefit from an experienced GovCon CPA firm that understands DCAA expectations. Filing an accurate ICE report now helps avoid costly audits and withholdings later.
Need Help With Your ICE Report?
Contact Our San Antonio CPA Firm
Badger CPA helps government contractors across Texas and the U.S. navigate DCAA compliance, prepare ICE reports, and implement systems that withstand audits. Contact us today for a consultation before the June 30th deadline.