Home > Commercial & Nontraditional Defense Contractors
NEW TO DEFENSE CONTRACTING?
Accounting Advisory Services for Commercial Companies Entering the
Defense Contracting Market
The FY 2026 National Defense Authorization Act (NDAA) may create new opportunities for commercial companies and nontraditional defense contractors entering the defense market.
While certain requirements may not apply to qualifying nontraditional defense contractors, companies must still understand their status, contract obligations, accounting requirements, and reporting responsibilities.
Abuan CPA Corp. provides accounting and advisory services to help companies understand these requirements and establish accounting processes that support government contract performance.
WHO THIS IS FOR
Is This You?
You're a commercial company — tech firm, AI startup, software developer, cybersecurity company, drone manufacturer, or engineering firm — pursuing or recently awarded a DoD contract or OTA agreement.
AI, software, or tech company exploring DoD opportunities
Drone, robotics, or hardware manufacturer entering defense
Cybersecurity firm pursuing government contracts
R&D company with SBIR, STTR, or OTA awards
Commercial company moving into prime or subcontractor roles
Startup that recently received its first DoD contract
WHY THIS MATTERS
Government Contract Accounting Is Different from
Commercial Accounting
Many commercial accounting systems are not designed around federal contracting requirements. Companies that enter the defense market without addressing this gap can face:
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Unsupported costs — expenses that can't be billed or recovered because they weren't tracked the way a contract requires
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Failed pre-award surveys — a system found inadequate before a contract is even awarded
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Disputed timekeeping — labor charges that don't hold up if a contractor is reviewed
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Rejected or delayed proposals — cost or pricing data that doesn't meet what a contracting officer expects
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Unexpected status changes — exemptions that quietly stop applying as your contract portfolio grows, without your realizing it.
These are the kinds of issues that surface during a government review — often after the fact, when they are harder and more costly to address.
A TYPICAL CLIENT JOURNEY
How We Typically Help New Government Contractors
Every company is different. Depending on your circumstances, you may begin at any stage of the process.
NDC Qualification
Assessment
Determine if your company meets criteria to qualify as a Nontraditional Defense Contractor (NDC) under the FY 2026 NDAA.
Defense Readiness
Assessment
Evaluate your readiness across key areas, including contracting, operations, cybersecurity, financial management, and more.
Accounting System
Advisory
Establish or enhance an accounting system designed to meet government contract requirements and support accurate cost tracking
Proposal Support
(as needed)
Guidance on preparing cost proposals, indirect rate support, and related schedules for DoD bids when required by the solicitation or contract opportunity.
Ongoing Accounting
Advisory
Deliver ongoing advisory support to help you maintain compliance, manage costs, and respond to government requests and audits.
Flexible Engagement
You can engage us for one specific need or for end-to-end support. We tailor our services to your stage, goals, and contract requirements.
Focused on Your Success
Our goal is to help you establish sound accounting practices that support government contract performance and long-term growth.
How We Can Help
Explore our services in more detail below or schedule a consultation to discuss your specific needs.
HOW WE HELP
Advisory Services for New Defense Contractors
Services may include:
NDC Qualification Assessment
Evaluate your company's status as a Nontraditional Defense Contractor (NDC) by reviewing its Department of Defense (DoD) contract and subcontract history and Cost Accounting Standards (CAS) coverage. The assessment also identifies FY 2026 NDAA provisions that may be relevant to your anticipated DoD contracting activities and provides accounting readiness observations to help you prepare for government contract performance.
Indirect Rate Structure Development
Guidance on developing fringe, overhead, and G&A rate structures suited to your business model and supportable proposal pricing.
Accounting System Setup Guidance
Guidance on configuring your accounting software for adequacy under applicable FAR and DFARS requirements, including preparation for a pre-award survey if requested.
Labor Tracking & Timekeeping
Guidance on establishing labor tracking and timekeeping practices that support applicable FAR and DFARS requirements.
Cost Tracking & Job-Costing Support
Guidance on organizing cost tracking and job-costing processes so contract costs can be recorded and accumulated by project, contract, or cost objective.
Cost Proposal Support
Guidance on preparing cost proposals and indirect rate structures for DoD bids, including proposals that may involve the Truthful Cost or Pricing Data Act.
Transition Planning as Contract Portfolios Grow
Advisory support to help anticipate thresholds, contract changes, or portfolio growth that may affect NDC status or trigger additional accounting, pricing, or reporting requirements.
Important: Services are advisory and consulting engagements. No specific outcome, contract award, exemption, approval, or government determination is guaranteed.
WHY WORK WITH ABUAN CPA CORP.
Nearly 20 Years with DCAA
The firm is led by a California CPA who spent nearly 20 years with the Defense Contract Audit Agency (DCAA), serving as a Senior Auditor and later as an Investigative Support Auditor.
Experience included performing audits of:
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Contractor accounting systems
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Incurred cost submissions
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Price proposals
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Forward pricing rate proposals
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Cost Accounting Standards (CAS) compliance
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Disclosure statements
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Termination settlement proposals
Experience also included conducting:
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Pre-award accounting system surveys
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Labor floorchecks
This experience provides firsthand insight into the accounting practices, documentation, and internal controls commonly evaluated during government reviews.
GET STARTED
Start with an NDC Qualification Assessment
The NDC Qualification Assessment is the recommended first engagement for most companies new to defense contracting. It documents your NDC status, maps the FY 2026 NDAA provisions relevant to your planned DoD work, and gives you accounting readiness observations you can act on before contract performance begins.
If your company has no prior DoD prime contract or DoD subcontract history and is seeking accounting advisory support only, you may contact Abuan CPA Corp. directly regarding accounting system setup and other advisory services.
COMMON QUESTIONS
Questions to Ask Before You Pursue Your First DoD Contract
How do I know if I qualify as a nontraditional defense contractor?
Under 10 U.S.C. §3014, a nontraditional defense contractor is generally an entity that is not currently performing, and has not performed for at least the one-year period preceding the solicitation of sources by the Department of Defense, any DoD contract or subcontract subject to full Cost Accounting Standards (CAS) coverage. The analysis depends on your specific DoD contract history, subcontract history, CAS coverage, contract structure, and applicable solicitation or acquisition documents. This is the type of advisory assessment Abuan CPA Corp. provides.
Do I need an adequate accounting system if I'm a nontraditional defense contractor?
Often, yes. Although the FY 2026 NDAA may provide certain exemptions for qualifying nontraditional defense contractors, contractors may still need accounting processes capable of tracking and accumulating contract costs by project, contract, or cost objective. An accounting system that supports government contract requirements can help with pricing, billing, contract management, documentation, and future compliance needs as your contract portfolio evolves.
What happens if I lose my nontraditional defense contractor status?
Your company may become subject to requirements that did not apply while treated as a nontraditional defense contractor. Depending on the facts, contract type, solicitation terms, and contract portfolio, these may include FAR Part 31 cost principles, DFARS business system requirements, and potentially Cost Accounting Standards. Abuan CPA Corp. provides advisory support to help you understand and prepare for these potential changes.
Should I start with the NDC Qualification Assessment, or do I need something broader?
In many cases, the NDC Qualification Assessment is the appropriate starting point because it evaluates your NDC status and identifies FY 2026 NDAA provisions that may be relevant to your anticipated DoD contracting activities. That assessment can help inform follow-on advisory services such as accounting system setup, labor tracking, indirect rate structure development, and cost proposal support. If your NDC status is already documented and you need support with a specific accounting area, you may start directly with that service instead.
Professional Services & License Disclosure: Abuan CPA Corp. is a California CPA firm providing accounting, bookkeeping, tax preparation, consulting, and advisory services. The firm’s shareholder holds a California CPA license. The firm’s services are within the scope of general accounting experience and do not include attest engagements. The firm does not provide audit, review, compilation, or other attest services and does not issue reports on attest engagements.
Advisory services are intended to help clients develop accounting practices that support government contracting requirements and prepare for potential government reviews. Outcomes are subject to determination by the relevant government agency. No specific outcome, approval, or finding is guaranteed.