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Time Tracking Requirements for Federal Contracts

Harvest enables federal contractors to comply with complex DCAA time tracking requirements through features like daily timesheet submissions and audit trails, mitigating risks of non-compliance.

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How much revenue is your team leaving on the table?

Most agencies run at 55-60% utilization. Even a small improvement means significant revenue. See what closing the gap looks like for your team.

Number of people who track billable time
$
Blended rate across roles (junior, senior, lead)
55%
Percentage of total hours that are billable. Industry average is 55-60%.
75%
A realistic target for service businesses is 70-80%.
Monthly revenue gap $0
Revenue at current utilization $0/mo
Revenue at target utilization $0/mo
Extra billable hours needed per person/day 0h
Annual revenue opportunity $0

Start tracking team utilization

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One click and you're timing. Try it right here: start a timer, add an entry, edit the details. This is exactly how it feels in Harvest.

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Acme Corp
Website Redesign
Homepage layout revisions
1:24:09
Content Strategy
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1:30:00
SEO Audit
Technical audit report
0:45:00
Brand Guidelines
Color system documentation
2:15:00
Logo Concepts
Initial sketches round 1
1:00:00
Today's total 6:54:09

Understanding DCAA Timekeeping Fundamentals

Federal contractors seeking compliance with the Defense Contract Audit Agency (DCAA) must adhere to stringent timekeeping standards derived from the Federal Acquisition Regulation (FAR) and the Defense Federal Acquisition Regulation Supplement (DFARS). A fundamental requirement is Total Time Accounting (TTA), which mandates that all hours worked, including regular, overtime, and leave, are meticulously recorded. This ensures transparency and accuracy in labor cost allocation, distinguishing between direct labor hours chargeable to contracts and indirect hours that support contract performance.

Daily time entry is critical; employees must log hours as they occur to maintain accuracy. Charge codes for specific tasks or projects are essential to avoid the pitfalls of generic labels like "admin work." Each employee must certify their time entries, which are then reviewed and approved by supervisors to ensure compliance. Harvest facilitates these requirements by enabling daily timesheet submissions and providing features to distinguish between direct and indirect labor costs.

Building a Compliant Timekeeping System

Creating a compliant timekeeping system involves developing clear, written policies and implementing robust internal controls. These controls include the segregation of timekeeping and payroll functions to prevent errors or fraud. Employees must certify their timesheets, and supervisors need to promptly review and approve them, ensuring the accuracy and appropriateness of all charges. Harvest supports this process by allowing managers to review and approve timesheets, maintaining accountability and compliance.

Audit trails are crucial for documenting any changes to timesheets. Every modification must include the original and corrected entries, a reason for the change, and employee/supervisor concurrence. Harvest's premium plan offers an Activity Log feature, ensuring all timesheet changes are traceable, thus supporting audit trail requirements. Ongoing training for employees and supervisors on these systems is vital to maintaining compliance and minimizing risks.

Record Keeping, Retention, and Audit Readiness

Maintaining accurate records is vital for compliance with federal contract requirements. Contractors must retain various records, such as timesheets and payroll documentation, for a minimum of three years post-final payment. Specific records, like clock cards and payroll sheets, have different retention periods, typically ranging from two to four years. Extensions may apply based on contract clauses or delayed submissions.

Regular internal audits can help identify discrepancies before a DCAA audit, ensuring preparedness. Harvest aids in record retention by securely storing timekeeping data and facilitating easy access to audit trails. By keeping up-to-date with DCAA regulations and conducting regular reviews, contractors can mitigate the risks of non-compliance and maintain audit readiness.

Consequences of Non-Compliance and Mitigation Strategies

Non-compliance with DCAA time tracking requirements can lead to severe consequences, including disallowed costs, fines, contract termination, and legal actions under the False Claims Act. The impact extends to future contracting opportunities and can damage an organization's reputation. To mitigate these risks, contractors should engage in continuous monitoring and seek expert consultation to stay informed of regulatory changes.

Harvest supports compliance by offering features that align with DCAA requirements, such as daily timesheet submissions and audit trails for timesheet changes. By integrating Harvest into your timekeeping processes, you can proactively manage compliance and avoid the pitfalls of non-compliance. Furthermore, ensuring adherence to other federal and state labor laws, like the Fair Labor Standards Act (FLSA), is essential for comprehensive compliance.

Harvest Time Tracking for Federal Contracts

See how Harvest facilitates compliance with DCAA requirements, featuring daily timesheet submissions and audit trails.

Harvest time tracking for federal contracts screenshot

Time Tracking Requirements for Federal Contracts FAQs

  • DCAA time tracking requirements are derived from the Federal Acquisition Regulation (FAR) and emphasize accurate recording of all hours worked, including direct and indirect labor. Employees must enter their time daily, with specific charge codes, and certify their entries. Harvest supports these needs with daily timesheet submissions and detailed tracking features.

  • To ensure compliance, establish clear timekeeping policies, maintain accurate records, and conduct regular internal audits. Harvest aids in compliance by enabling daily submission of timesheets and maintaining audit trails for changes, helping you meet regulatory standards.

  • Contractors must retain various records, including timesheets, payroll records, and supporting documentation, for at least three years after final payment. Specific records like clock cards and payroll sheets have retention periods of two to four years. Harvest helps store and access these records efficiently.

  • Non-compliance can result in disallowed costs, fines, contract termination, and legal actions. It can also impact future contracting opportunities. Harvest helps mitigate these risks by ensuring compliance with features like audit trails and daily time tracking.

  • Generally, records must be kept for at least three years after the final payment. However, specific records like payroll sheets may have different retention periods. Harvest aids in securely storing and organizing these records for easy access.

  • Harvest supports DCAA compliance by allowing daily timesheet submissions, maintaining audit trails, and enabling supervisors to review and approve timesheets. These features help ensure accurate and compliant timekeeping for federal contracts.

  • Yes, Harvest allows you to track both direct and indirect labor by setting flexible rates for billable and non-billable hours. This distinction is crucial for accurate billing and compliance with federal contract requirements.