The incurred cost proposal is due six months after the close of the fiscal year in which costs were incurred. The rule comes from FAR 52.216-7(d)(2)(i) and applies to every contractor with a flexibly priced federal contract regardless of size. For a contractor on a calendar fiscal year, that means a June 30 deadline. For a contractor on the federal fiscal year ending September 30, the deadline is March 31. The deadline is keyed to your fiscal year end — not the federal government's — and missing it triggers a chain of consequences ranging from reduced provisional billing rates to unilateral final rate determinations issued by the contracting officer.
The 6-Month Rule (FAR 52.216-7(d)(2)(i))
The Allowable Cost and Payment clause at FAR 52.216-7(d)(2)(i) states that the contractor shall submit an adequate final indirect cost rate proposal "within the 6-month period following the expiration of each of its fiscal years." There is no carve-out for company size, contract type, or industry — if your contract incorporates the clause (Section I of every flexibly priced contract), the six-month rule applies. The rule is mechanical: count six months forward from your fiscal year-end date, and that is your due date.
Due Dates by Fiscal Year End
Most U.S. small and mid-size GovCon firms use a calendar fiscal year (December 31), which produces a June 30 deadline the following year. Contractors aligned with the federal fiscal year (September 30) are due March 31. Custom fiscal years are valid and follow the same six-month rule: a March 31 fiscal year end produces a September 30 deadline; a June 30 year end produces a December 31 deadline. The interactive guide below includes a 12-row lookup table covering every fiscal year-end month so you can map your year-end directly to your due date.
Can the Deadline Be Extended?
FAR 52.216-7(d)(2)(ii) allows the contracting officer to grant a reasonable extension if the contractor requests one in writing before the original deadline. Extensions are discretionary — not automatic — and they require a substantive justification. Routine workload pressure or year-end accounting work is not a sufficient reason. Acceptable reasons include delayed prior-year audit results, accounting system migrations, and material data dependencies outside the contractor's control. Approval must come from the cognizant Administrative Contracting Officer (ACO) in writing; without documented approval, the original deadline still controls.
What Happens If You Miss the Deadline
A late or inadequate ICP triggers explicit remedies under FAR 52.216-7. The contracting officer may unilaterally reduce provisional billing rates on flexibly priced contracts, directly cutting cash flow until the situation is resolved. Under FAR 52.216-7(d)(6), the ACO may also establish final indirect cost rates unilaterally — almost always in the government's favor, not the contractor's. Late filings draw closer audit scrutiny, and any expressly unallowable costs found in indirect pools can trigger penalties under FAR 42.709 equal to the disallowed amount, doubled for repeat findings.
The Inadequacy Trap
Submitting on day 180 is not enough — the submission must be adequate. DCAA screens every incoming proposal against the 47-question Adequacy Checklist. If your submission fails any of the checklist questions, DCAA issues an inadequacy letter listing the deficiencies and the contractor must correct and resubmit. That cycle pushes audit fieldwork and final rate settlement further out, even when the original submission was on time. Self-running the adequacy checklist before submission is the single highest-leverage step a contractor can take.
Building a 6-Month Pre-Submission Calendar
Treat the six months between fiscal year end and the deadline as a structured workstream, not a deadline sprint. Month 1: close the books and reconcile payroll to IRS Form 941. Month 2: scrub indirect pools against FAR 31.205 for expressly unallowable costs. Month 3: compute indirect rates per FAR 31.203 and your CAS 410 base election. Month 4: generate Schedules A–O. Month 5: self-run the DCAA adequacy checklist. Month 6: officer signs FAR 52.242-4 Schedule N and the package ships to DCAA and the cognizant ACO. Aim to submit on day 150–165, not day 180 — the buffer absorbs late audit results and last-minute reclassifications without putting the deadline itself at risk.
Why The Date Matters Beyond Compliance
The due date is not just a compliance checkpoint — it is the gating event that lets contracts close out. Until DCAA settles your rates and the ACO issues a final rate agreement letter, every flexibly priced contract for that fiscal year remains open and unbillable for closeout. Contractors with multiple late years stack up unclosed contracts, locked-up retainage, and unbillable completion invoices. Timely, adequate submission is one of the highest-value compliance activities a government contractor can perform.
The interactive guide below answers the most-asked deadline questions in featured-snippet format — including a complete fiscal-year-end-to-due-date lookup table, the full FY-close-to-final-rates timeline, extension request rules, missed-deadline consequences, and a month-by-month pre-submission calendar.