SF 1408 evaluates an accounting system, not a software product
Standard Form 1408 is the Pre-Award Survey of Prospective Contractor Accounting System. The current GSA form page identifies the form as revision 01/2014 under FAR 53.209-1(f). The survey records whether the prospective contractor's accounting system is acceptable, unacceptable, or acceptable with a recommendation for follow-on review.
The form does not approve a brand of timesheet, general ledger, or ERP. It evaluates whether the contractor's complete system is designed and operating to produce the required accounting information. Policies, procedures, people, configuration, reconciliations, and records matter alongside software.
The two explicit labor criteria on SF 1408
Section II asks whether the accounting system provides a timekeeping system that identifies employees' labor by intermediate or final cost objectives. It separately asks whether a labor distribution system charges direct and indirect labor to the appropriate cost objectives.
These criteria are connected but not identical. The timekeeping system records hours by employee and objective. Labor distribution applies labor dollars to the direct and indirect objectives and connects that result to payroll and the accounting records.
The surrounding SF 1408 criteria still apply
A strong timesheet does not satisfy the rest of SF 1408. The checklist also addresses generally accepted accounting principles in the circumstances, segregation of direct and indirect costs, accumulation of direct costs by contract, logical allocation of indirect costs, general-ledger control, at-least-monthly posting, exclusion of unallowable costs, and contract-line-item identification when required.
The form also asks whether the system provides required financial information for limitation-of-cost or payment clauses, supports progress-payment requests where relevant, develops reliable data for follow-on pricing, and is currently in full operation.
Map each criterion to an owner, process, report, and test
Do not answer the checklist with a software name. For each criterion, identify who owns the process, how the system is configured, which recurring report demonstrates the result, where the evidence is retained, and which recent period proves the process operates.
- Criterion and the contractor's interpretation for the proposed contract
- Policy or procedure section that defines the control
- Responsible employee and backup owner
- System configuration or accounting records involved
- Recurring report and reconciliation frequency
- One recent sample demonstrating operation
- Known deficiency, corrective action, owner, and target date
Evidence for the timekeeping criterion
Prepare the written timekeeping and labor-charging policy, employee training records, active work authorizations, direct and indirect code list, daily time records, employee certifications, supervisor approvals, correction history, and evidence of how secure-site or prolonged-absence exceptions operate.
Use a sample that includes ordinary time, indirect time, a correction, a new or closed work authorization, and an employee with a nonstandard schedule. A single perfect timesheet does not demonstrate the range of the process.
Evidence for the labor-distribution criterion
Prepare a labor-distribution report showing hours and labor dollars by employee and direct or indirect cost objective. Reconcile total distributed labor to payroll for the same period and show how the result reaches the job-cost ledger or general ledger.
Explain rate sources, effective dates, payroll adjustments, leave treatment, uncompensated overtime where applicable, and corrections after close. The control totals should be repeatable without a one-time spreadsheet that only one person understands.
What ‘currently in full operation’ changes
SF 1408 asks whether the accounting system is currently in full operation. A planned workflow, unopened software subscription, or draft policy is not the same as an operating system with live records. If part of the system is not operating, the form asks the reviewer to describe what is operating, set up, anticipated, or nonexistent.
Run at least one complete period before relying on the design: daily entry, correction, certification, approval, labor distribution, payroll reconciliation, contract reporting, and accounting posting. Correct the failures and retain evidence of the rerun.
Can QuickBooks be part of an SF 1408-ready system?
A general ledger brand does not answer the SF 1408 questions. QuickBooks can be part of the system when the contractor's methods, additional tools, policies, mappings, and reconciliations produce the required results. It can also be poorly configured and fail to provide adequate information.
Document which system owns time, payroll, labor distribution, the general ledger, contract cost accumulation, indirect allocation, billing, and evidence retention. Define every interface and reconciliation instead of assuming an integration transfers responsibility.
A practical pre-award readiness sequence
Start with the proposed contract and the official form, not a generic compliance checklist. Confirm which clauses and lower-level cost identification apply. Then map the complete accounting system, operate it, sample it, and resolve deficiencies before representing that it is ready.
- Download the current SF 1408 and DCAA pre-award checklist from the official sites.
- Assign an accountable owner to every applicable criterion.
- Document direct, indirect, and unallowable-cost treatment with qualified accounting support.
- Configure timekeeping and work authorization around the approved cost-objective structure.
- Operate a complete period and reconcile the control totals.
- Run samples from source time through payroll, labor distribution, ledger, and contract reporting.
- Record deficiencies honestly and retest corrective actions.
- Coordinate the final representation with the people responsible for the proposed contract and accounting system.