# Class Deviation 2012-O0013
# Class Deviation 2012-O0013 - DCAA Policy and Procedure for Sampling Low-Risk Incurred Cost Proposals

Status: Active
Date Issued: JUL 24 2012
Signed By: Frank Kendall, Under Secretary of Defense for Acquisition, Technology and Logistics
Scope: All DoD contracting officers

## Summary

This deviation authorizes DoD contracting officers to satisfy FAR audit requirements for incurred cost proposals by relying on either a DCAA audit report or a DCAA memorandum documenting that a proposal was assessed as low-risk and not selected for further audit. The underlying DCAA policy establishes risk-based sampling percentages and criteria for classifying incurred cost proposals as high-risk or low-risk. The deviation continues a risk-based sampling process in use since 1994 and remains in effect until incorporated into the FAR or DFARS or otherwise rescinded.

## Required Contracting Officer Actions

1. For purposes of satisfying audit requirements at FAR 4.804-5(a)(12), 42.705-1(b)(2) and 42.705-2(b)(2)(i), rely on either a DCAA audit report or a DCAA memorandum documenting that DCAA deemed the incurred cost proposal to be low-risk and did not select it for further audit pursuant to FAR 42.705-1(b)(1)(iii).

## Affected Provisions and Clauses

### 52.216-7,  (Clause)
- Prescribed in: 16.307(a)
- Change type: MODIFIED
- Action: Modify clause 52.216-7

## Notes

Low-risk backlog relief: Low-risk adequate annual incurred cost proposals submitted by contractors with auditable dollar value (ADV) of $1 million or less and received prior to October 1, 2011 will not be selected for audit. A Memorandum for Contracting Officer will be issued in lieu of an audit report for these proposals.

Mandatory audit threshold: All adequate incurred cost proposals exceeding $250 million in ADV must be audited regardless of risk classification. For proposals between $100 million and $250 million in the low-risk pool, a mandatory incurred cost audit must be performed at least once every three years.

Sampling percentages: Low-risk proposals are sampled at 1% for ADV up to $1 million (received after September 30, 2011), 5% for $1 million to $50 million, 10% for $50 million to $100 million and 20% for $100 million to $250 million.

Closure method: Low-risk proposals not selected for audit are closed with disposition code N (no formal report issued). Costs questioned and total exception dollars are reported as zero.

## Suggested Questions

You can ask your AI assistant:
- What actions do I need to take for this deviation?
- Does this deviation affect commercial acquisitions under Part 12?
- Which clauses need to be removed from my existing contracts?
- How does this deviation change 52.216-7 specifically?
- Are there any SAM registration implications?

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Source: https://part52.dev
Generated: 2026-03-20
Memorandum: https://www.acq.osd.mil/dpap/policy/policyvault/USA004064-12-DPAP.pdf