TL;DR. File a complete incurred cost submission within six months of fiscal year-end, because it is the only paperwork that turns your guesses into real money (and no, the proposed shortcuts are not law yet).
- Calendar-year contractor? Your FY2026 submission is due 30 Jun 2027 under the current rules. Build it on today's schedules.
- Hoping the shorter list saves you? The FAR rewrite is only proposed. Comments closed 19 Oct 2026 and I found no final rule or effective date.
- Hold cost-type incentive or fixed-price incentive contracts? The proposal would clarify that the submission clause applies to you. Check your contracts now.
- Tempted to send it a little incomplete? Don't. A missing required schedule can get the package returned as inadequate, and that doesn't beat the clock.
What this filing actually does
All year, you bill the government using provisional indirect rates. Those are educated guesses about your overhead, G&A and fringe, set before you know how the year will end. Then the year ends, the real costs land, and the guesses are wrong by some amount. Maybe a little, maybe a lot.
The incurred cost submission is how you fix that. You send your actual costs and your proposed final indirect rates to your contracting officer and the auditor. Once those rates are agreed, you true up. If you under-billed, you collect. If you over-billed, you pay back. Either way, the filing is where "what we billed" becomes "what we get to keep."
So what: Treat it like a tax return for your government work, not a clerical chore. Late or sloppy filings delay settlement, and delayed settlement means your money sits in limbo.
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The six-month clock and the "inadequate" trap
The rule has not changed. Your final indirect cost rate proposal is due within six months after your fiscal year ends. For a calendar-year company, FY2025 was due 30 Jun 2026 and FY2026 is due 30 Jun 2027. An extension has to be granted in writing by your contracting officer. A hallway "yeah, no problem" does not count.
The sneaky part is adequacy. Before anyone audits anything, your package gets checked for completeness. If a required schedule is missing, it can come back as inadequate, and an inadequate filing doesn't satisfy the six-month deadline. You can be "on time" in your own mind and late in everyone else's.
On tooling, DCAA's current Power Query ICE Model is version 1.08, released in July 2026. The older May 2019 version is still available. Either way, you submit through the Contractor Submission Portal.
So what: Run your own completeness check a few weeks before the deadline, and if you need more time, get the extension in writing early.
The proposed rewrite: real, but not yet your problem
On 18 Sep 2026, the FAR Council published a proposed rule (FAR Case 2026-006) as part of the Revolutionary FAR Overhaul. It aims to cut contractor burden and speed up closeout. The preamble says it would remove several items from the list that makes a submission adequate.
Vendor analyses give specifics, and I could not read the full rule text, so treat these as pointers:
- Redstone GCI says Schedule L would be eliminated, Schedules K and O would fold into Schedule H, and Schedule J would cover only subcontracts above the certified cost or pricing data threshold.
- GovConDash counts the required list dropping from 15 items to 12, with the IRS Form 941 reconciliation gone and the subcontract listing narrowing to subcontracts above $2,500,000.
- The proposal would also clarify that the submission clause covers cost-type incentive contracts, including fixed-price cost incentive contracts.
Key insight: The proposal trims the paperwork, not the obligation. Even if every cut survives, you still file every year, still inside six months, and still get returned if the package is incomplete. Filing on the old list is safe. Filing on a list that isn't final yet is a gamble.
There is one open question. One text snippet says the clause does not apply to labor-hour contracts, while several contractor guides say time-and-materials and labor-hour work is covered. I couldn't reconcile them. Read the clause prescription and your own contract.
So what: Keep building on the current schedules. Watch docket FAR-2026-0006 for a final rule, and note the separate paperwork-burden comment window runs to 23 Nov 2026.
What is already in force through deviations
The overhaul is also moving through class deviations. DoD issued one for Part 42 (DARS Tracking Number 2026-O0050), and DOE issued PF 2026-15 to adopt the same text. The Part 42 text keeps the core process. You submit an adequate final indirect cost rate proposal to the contracting officer and the auditor, and more supporting data can be requested once adequacy is found.
Wiley reports Part 42 shrank from 17 subparts to 13. Meanwhile, the codified clause on acquisition.gov still carries the six-month rule, and I saw no sign it has been formally amended. The DoD deviation fragments I saw also mention a 30-day window for giving support on questioned direct costs, but I couldn't see the full context. Read the document before leaning on it.
So what: Check which deviation, if any, your contract actually incorporates. The text on your award is what governs you, not the headlines.
Module: Defense Finance & Budgeting
This post touches on concepts covered in depth in the Defense Finance & Budgeting module. PPBE, color of money, EVM, appropriations, and the fiscal mechanics behind every program.
Start This Module Free →A copy-and-use submission tracker
Paste this into your own calendar or spreadsheet. Replace the dates with your fiscal year-end plus the offsets shown.
| Task | Target timing | Owner | Done? |
|---|---|---|---|
| Close the books for the fiscal year | Year-end + 60 days | Accounting | [ ] |
| Build schedules in the ICE model | Year-end + 90 days | Government contracts lead | [ ] |
| Tie actual costs to billed amounts by contract | Year-end + 120 days | Accounting | [ ] |
| Adequacy self-check: every required schedule present | Year-end + 150 days | Someone who didn't build it | [ ] |
| Need more time? Get a written extension | Before year-end + 5 months | Contracts manager | [ ] |
| Submit via Contractor Submission Portal | Year-end + 6 months, latest | Finance lead | [ ] |
| Check the Federal Register for final rule or new deviation | Monthly | Contracts manager | [ ] |
So what: The adequacy self-check is the row people skip. Give it to someone fresh, because they will spot the missing schedule you stopped seeing weeks ago.
Incurred Cost Submission: What Goes In
| Schedule | What It Shows | Where the Numbers Come From | Where Filings Fail |
|---|---|---|---|
| Summary of claimed rates | Your actual indirect rates for the year | General ledger, closed and reconciled | Rates that do not tie to the trial balance |
| Direct cost by contract | What each contract consumed | Job cost detail | Contracts missing, or totals that do not foot |
| Reconciliation to the books | That the claim matches the accounting system | Trial balance | The step people skip, and the top adequacy finding |
| Adjustments for unallowables | That unallowables were removed | Screening accounts | Screening that was never actually run |