As we begin October 31st, we’ve invested heavily in researching all sources to identify the Halloween costumes which will most likely be used by Government entities (including Congress), agencies, and employees (or wannabe employees in the context of political candidates).
Topics: Redstone GCI
A recent DCAA audit reintroduced (or resurrected) a DCAA MRD (Memorandum for Regional Directors) dated March 22, 2010 which provided auditors with DCAA’s liberal interpretation of a January 2010 change to FAR 31.205-46(b) limiting allowable airfare to “lowest priced airfare available to the contractor.”
DCAA’s July 19th AGM or Audit Guidance Memorandum (19-PAS-003(R)) implemented the Section 803 requirement of the 2018 NDAA (National Defense Authorization Act) that DoD/DCAA adopts commercially accepted standards of materiality (in application) to incurred cost audits. This requirement is in the broader context of continuing Congressional interest in the incurred cost backlog and performance of incurred cost audits. More specifically, the subsection which requires commercially accepted standards of materiality is designed to improve the efficiency of the contract auditing process.
Topics: DCAA Audit Support
A recent DoD-IG (Department of Defense-Inspector General Report (DODIG-2019-070) has unfortunately reinforced DCAA’s audit interpretations of the reasonableness of contractor compensation (reference to FAR 31.205-6(b)). The IG (apparently with help from DCAA) reviewed ACO (Contracting Officer) actions to resolve/disposition DCAA (Defense Contract Audit Agency) advisory audit reports which included assertions that contractors had claimed unreasonable compensation (primarily for contractor executives).
Some of us have been tracking the long overdue Congressional mandate for the United States to achieve a ready-state for auditable financial statements. Although it may come as a surprise, we’ve uncovered a somewhat reliable (thus somewhat unreliable) rumor that the next NDAA (National Defense Authorization Act) will include section 401(A.F.) which will require the Department of Defense (more specifically DCAA/Defense Contract Audit Agency) to provide technical assistance to all other agencies, inspector generals’, GAO (Government Accountability Office) and the hordes of independent private auditors who have thus-far failed in achieving that mystical milestone of fully auditable federal government financial statements.
Topics: Redstone GCI
A recent ASBCA decision (No 61583) confirms that Government benevolence does not extend to penalties associated with a contractor’s final indirect cost rate proposal (FICRP) which included expressly unallowable indirect costs. In one case, the issue was unallowable legal costs incurred as a result of the US Department of Justice (DOJ) investigation of the contractor, which was triggered by information suggesting that the contractor claimed indirect salaries for an individual whose services were as the housekeeper for the owners of the company and thus unallowable as costs allowable to Government contracts.
In its report dated November 27, 2018 (DODIG-2019-029), the IG reviewed 12 of 540 task orders (issued between September 2014 to October 2017) to determine if contractor employees met the contract schedule labor qualifications. The contract vehicle is the OASIS (One Acquisition Solution for Integrated Services), administered by the GSA, but used by multiple DoD (and other Government) agencies. The good news is that the IG reported 1,175 of 1,287 contractor employees met the labor category qualifications; the bad news is the remaining 112 employees did not meet the labor qualifications, and/or the DoD agency could not document that contractor employees met the labor qualifications. Thus, DoD agencies authorized $28 million of potentially improper payments (based on the IG’s statistical projection), authorized $574K of potential improper payments for employees who did not have qualification documentation, and did not consider the potential impact on contract performance and price before authorizing $6.8 million for employees without relevant education and work experience.
As we again approach Halloween and the night of tricks or treats, we’ve been able to identify and report a number of the more popular Halloween costumes (or masks) among government agencies and/or (n one case) an ex-government “CEO”. Some of these trending costumes include:
Topics: Redstone GCI
In late 2013, the BBA (Bipartisan Budget Act) significantly changed the FAR 31.205-6(p) regulatory cap for allowable contractor employee compensation. In a highly politicized action, the Obama Administration convinced Congress to reduce allowable compensation to $487,000 for any contractor employee effective for contracts on or after June 24, 2014. Additionally, Section 702 of the BBA prescribed the method for annual increases to the statutory cap (based upon the change in the Employment Cost Index for all workers as calculated by the BLS (Bureau of Labor Statistics).
As we near the end of calendar year 2017, many will be thinking of some resolutions for the upcoming “Year of the Dog” (the 2018 animal per the Chinese Calendar). In fact, we’ve discovered that Government agencies sometimes consider similar resolutions, and in the case of DCAA (Defense Contract Audit Agency), we’ve accidentally been copied on one of the unofficial versions of its 2018 New Year’s resolutions (which are three months late, given the government fiscal year started October 1, 2017).