Redstone_-_2015_Halloween_Blog

As we approach Halloween and the night of tricks or treats, we’ve done some exhaustive research (more accurately hypothesizing) as to the trending costumes (favored by DCAA or DCMA). Some of the favorites:

The Invisible Man/Woman  

Invisible_ManA new favorite with DCAA (Defense Contract Audit Agency) as it relates to its newly invisible audit policies. For years, DCAA seemed to embrace full disclosure in terms of posting its audit policies, audit programs and CAM (Contract Audit Manual) on its publicly accessible website; however, it now appears that DCAA is no longer willing to share its policies (hence for all intents and purposes, “invisible” to the contractors who would really like to know what’s coming with respect to DCAA audits).  

Some may question why DCAA ever showed its hand, so to speak, which maybe the same question DCAA is now asking itself. Why provide any help in any form to contractors when it’s far more satisfying to use the element of surprise. Just show up and holler, “trick or treat”….and don’t give me (the auditor) any treats because that would constitute an illegal gratuity.

Alfred E. Neuman

Alfred-NeumanAlfred E. Neuman (Mad Magazine noted for his “What me worry” quotation).  A new favorite among DCAA management/executives reflecting their ambivalence to numerous trends where contract audits are being outsourced to IPAs (Independent Public Accounting firms). In fact, Section 868 of the 2016 NDAA (National Defense Appropriations Act) is now adding the DOD-IG as supplementing DCAA in the quest to get (sort of) current on the infamous incurred cost backlog (prior year indirect cost rate proposals).

For years prior to 2009, DCAA was vigilant in terms of monitoring its costs (hourly rate) measured against outsourced contract audits (the hourly rate of IPAs); however, DCAA no longer shows any concern for the migration of contract audits away from DCAA.   Alfred E. Neuman’s “what me worry” is now the implied mantra of DCAA Management.

Marty McFly (Back to the Future)  

Back-to-the-FutureA costume embraced by some of DCAA’s more experienced auditors whose experience goes back to a time when auditors were allowed to talk to contractors and to contracting officers to facilitate timely and mutually beneficial solutions to compliance with contract regulations. For example, the process of comparing notes with contractors before the contractor made accounting changes as well as before the contractor prepared and submitted bid proposals or bid rates.  

Designed to maximize efficiencies for everyone; hence, the concept of back to the future (Marty McFly) is embraced by experienced auditors as well as the contractor community. Unfortunately, Back to the Future only exists in the movies.

Frozen (Let it Go)  

Frozen-Let-it-GoPopular among DCAA’s field auditors who are inclined to sing “Let it Go” during the exit conference with contractors. Translated, just agree to our findings (cost questioned) and let it go (“it” in reference to contractor funds as if contractors don’t have fiduciary responsibilities to shareholders).  

DCMA is also embracing “Let it Go”; notably on contractor bid rates (forward pricing rates) where DCMA is recommending unreasonably low rates, typically with little or no explanation for artificially low rates. The message to the contractor, “Let it Go” (agree with the government rates even if it means performing the contract at a loss…after all it’s a pleasure just to be a government contractor).

Rotating Face Mask

Rotating-Face-MaskLastly, although it’s not your typical costume, one other trending costume (DCAA and DCMA) is the rotating face mask; one side representing a DCAA auditor, the flip-side a DCMA reviewer.

The two masks are eerily similar reflecting the shifting of roles and responsibilities from DCAA to DCMA coupled with the number of DCAA auditors jumping ship (going to DCMA). Not exactly a “treat” for Government contractors.

 

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Written by Michael Steen

Michael Steen Mike Steen is a Emeritus Advisor with Redstone Government Consulting, Inc. and a specialist in complex compliance issues to include major contractor cost accounting & business system regulations, financial compliance, resolution of DCAA audit issues, Cost Accounting Standards application, litigation support, and claims preparation. Prior to joining Redstone Government Consulting, Mike served in a number of capacities with DCAA for over thirty years, and upon his retirement, he was one of the top seven senior executives with DCAA. Mike Served as a Regional Director for two DCAA regions, and during that time was responsible for audits of approximately $25B and 800 employees. In October 2001, he was selected for the Senior Executive Service and in 2006 he received the Presidential Rank Award. During Mike’s tenure with DCAA, he was involved in conducting or managing a variety of compliance audits, to include cost proposals, billing systems, Cost Accounting Standards, claims, defective pricing, and then-evolving programs such as restructuring, financial capability and agreed-upon procedures. He directly supported the government litigation team on significant contract disputes and has prepared and presented various lectures and seminars to DCAA staff and business community leaders. Since joining Redstone Government Consulting in June 2007, Mike has developed and presented training and seminars on Government Contracts Compliance to NCMA, Federal Publications Seminars and various clients. Mike also is a prolific contributor of written articles to government contracting publications, as well as to our own Government Insights Newsletter. Mike also serves as the director of our training service offerings, with responsibilities for preparing and developing course content as well as instructing our seminars to clients and general audiences throughout the U.S. Mike also serves as a faculty instructor for the Federal Publications Seminars organization. Education Mike has a BS Degree in Business Administration from Wichita State University. He is also a graduate of the DCAA Director’s Fellowship Program in Management, and has a Masters Degree in Administration from Central Michigan University. Mr. Steen also completed a number of OPM’s management and executive development courses.

About Redstone GCI

Redstone GCI is a consulting firm focused on fulfilling the needs of government contractors in all areas of compliance. With a singular mission to help contractors through the multiple layers of “red tape,” we allow contractors to focus on what they do best – support their mission with the U.S. Government. We are home to a group of consultants made up of GovCon industry professionals, CPAs, attorneys, and retired government audit and acquisition professionals.

Our focus and knowledge of audit and compliance functions administered by DCAA and DCMA will always be at the heart of what we do. However, for the past decade, we’ve strategically grown to support other areas of the government contractor back-office with that same level of focus and expertise. We’ve added expertise in contracts management, subcontract administration, proposal pricing, various software systems, HR and employment law, property administration, manufacturing, data analytics/reporting, Grant specialists, M&A, and many other areas. When we see a trend in the needs of contractors, we act to ensure we can provide the best expertise in the market to fulfill those needs.

One thing our clients can be certain of is that with the Redstone GCI Team in your corner, there is no problem too big and no issue too technical for our team to tackle.

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