Defence Cost Principles Non-Compliance Penalties
Definition
Defence contractors must adhere to Cost Principles defining allowable costs recoverable from Defence contracts. Non-compliance results in costs being deemed unallowable, leading to financial disallowances during audits.
Key Findings
- Financial Impact: AUD 50,000+ per major contract in unrecoverable costs (based on typical audit disallowances for overhead misallocation)
- Frequency: Per contract audit cycle
- Root Cause: Manual cost classification errors in accounting systems
Why This Matters
The Pitch: Defense and Space Manufacturing players in Australia waste AUD 50,000+ annually on unallowable costs due to Cost Principles errors. Automation of cost allocation eliminates this risk.
Affected Stakeholders
CFO, Cost Accountants, Contract Managers
Deep Analysis (Premium)
Financial Impact
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Current Workarounds
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Methodology & Sources
Data collected via OSINT from regulatory filings, industry audits, and verified case studies.
Related Business Risks
C/SCSC System Compliance Overhead
CAS-like Disclosure and Audit Failures
Procurement Delays and Cost Escalations
Idle Capacity from Compliance Bottlenecks
Export Control Permit Breaches
Compliance Ambiguities & Red Tape
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