SF 1408 Decommissioned

November 9, 2026

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What the Revolutionary FAR Overhaul may mean for DCAA, procurement offices, and government contractors.

By Paul Calabrese, Principal, Outsourced Accounting & Advisory Services

At a glance: The Revolutionary FAR Overhaul eliminated SF 1408 and its related pre-award survey framework. The requirement in FAR 16.301-3(a)(3) remains, but the FAR no longer provides the familiar regulatory checklist for determining whether a contractor's accounting system is adequate for a cost-reimbursement contract or order.

When a prospective contractor with no prior experience meeting the financial requirements of a cost-reimbursement contract is selected for award, the Procuring Contracting Officer (PCO) may request that the Defense Contract Audit Agency (DCAA) review the adequacy of the contractor’s accounting system under FAR 16.301-3(a)(3). The provision states that “the contractor's accounting system is adequate for determining costs applicable to the contract or order.”

DCAA has used SF 1408, Preaward Survey of Prospective Contractor Accounting System, to review a contractor’s “accounting system design assertion.” SF 1408 functions as a checklist of the mandatory accounting-system requirements associated with cost-reimbursement contracting.

The Revolutionary FAR Overhaul (RFO) eliminated SF 1408 to reduce regulatory burden because the form was not a statutory requirement. As part of that change, FAR 9.106, Pre-Award Surveys, was eliminated, together with the eight related forms listed in FAR 53.209-1(f), Responsible Prospective Contractors, including SF 1408, last revised in January 2014.

The RFO reduced acquisition mandates by one-third, or approximately 2,700 mandates, including the SF 1408 checklist. According to DCAA, the remaining regulatory requirement is FAR 16.301-3(a)(3), which requires an adequate accounting system but no longer supplies a regulatory checklist for assessing adequacy.

Key Questions

Why does the elimination of SF 1408 matter?

How might the change affect DCAA?

Is another checklist available?

Can DCAA continue using a decommissioned form?

How might procurement offices and solicitation evaluation points be affected?

What does the change mean for government contractors?

Why the Change Matters

PCOs have used the checklist to determine whether a contractor that is new to cost-reimbursement contracting can administratively satisfy the requirements of an adequate accounting system. Cost-reimbursement contracts are distinct from commercial contracting because widely used QuickBooks Online (QBO) does not natively integrate three necessary capabilities: labor distribution, indirect-rate schedules, and invoicing through a public voucher. Specialized software that includes all three capabilities can be expensive. Contractors using QBO therefore need third-party add-ons or must perform these functions manually.

This issue is particularly important to PCOs because many Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) awards involve start-up contractors that may be unfamiliar with cost-reimbursement accounting-system requirements. Consequently, many Department of War procurement offices use DCAA’s SF 1408 PDF form-filler that allows prospective contractors to self-certify.

One significant consequence of eliminating SF 1408 is that newly anticipated or planned systems, which the checklist permitted, may no longer be accepted in the same manner. That flexibility allowed a contractor to identify criteria not yet operating so that it would not have to invest in an expensive accounting system before knowing whether it would receive the award.

Potential Impact on DCAA

The removal of SF 1408 raises questions about how DCAA will conduct pre-award accounting-system evaluations under the revised FAR. DCAA continues to provide training slides on pre-award accounting-system requirements through their Office of Small Business Program presentation descriptions, but in 2026, it appears that DCAA discontinued webinars on this subject matter.

The elimination of the SF 1408 removes a longstanding and familiar framework for evaluating prospective contractors’ accounting systems. As a result, important questions remain about how DCAA will implement these reviews under the revised FAR.

The removal of the form may necessitate DCAA retooling its internal policy and could result in elimination or revision of Audit Program Activity Code 17740, “Preaward Survey of Prospective Contractor Accounting System”. DCAA may be unable to perform these PCO-requested audits in their current form, which could also require website changes and staff retraining.

DCAA’s current public position, stated in its presentation “Introduction to DCAA and the Audit Process,” is that the only FAR citation currently requiring an adequate accounting system is in FAR 16.301-3(a)(3): “the contractor’s accounting system is adequate for determining costs applicable to the contract or order.”

Is Another Checklist Available?

DCAA could potentially use the business-system criteria for “Accounting System Administration” in DFARS 252.242-7006. Those criteria are identical to the SF 1408 checklist and add four requirements. DCAA also could develop its own checklist based on SF 1408, although it is unclear whether they would do so because DCAA audits appear to be predicated on regulatory citations in the FAR.

The phrase “DCAA-approved accounting system” remains technically imprecise. DCAA states that contractors cannot ask DCAA to approve their accounting systems and that DCAA performs an audit only when requested by an appropriate federal entity.

Also to note, DCAA states that they review the “pre-award accounting system design assertion.” DCAA does not test transactions, rather they review the design of the accounting system functionality and cost accounting structure.

Potential Impact on PCOs and Solicitations

Based on the research, solicitation requirements concerning accounting-system adequacy generally fall into three categories:

Scored competitive benefit: An adequate accounting system contributes points or other credit toward the award evaluation.
Cost-reimbursement eligibility: The accounting system must be adequate under FAR 16.301-3(a)(3).
Pre-award responsibility or readiness review: A self-certification may affect whether the contractor receives the award.

Impact on Government Contractors

Eliminating the SF 1408 pre-award checklist may make it more difficult for some contractors to obtain cost-reimbursement awards:

A PCO may decide not to award to a contractor that is new to cost-reimbursement contracting because, without a defined checklist, the perceived risk of an inadequate accounting system may be harder to mitigate.
Contractors may lose the ability to document that they anticipate or plan to satisfy criteria that are not yet in place.

Next Steps

A contractor pursuing a cost-reimbursement solicitation should consider providing the government with a completed 10-page SF 1408 PDF form-filler. Although SF 1408 has been decommissioned, the completed checklist still serves as a self-certification demonstrating how the contractor’s accounting-system design addresses the SF 1408 criteria. DCAA auditors have used the completed checklist when performing a pre-award accounting system survey.

For assistance with the SF1408 checklist or other DCAA or federal procurement questions, please contact GRF’s Government Contracting team.