The simple English Wikipedia encyclopedia defines a Tsunami as “a series of fast moving waves in the ocean caused by powerful earthquakes or volcanic eruptions”. Arguably one can equate negative DOD Inspector General Reports to powerful earthquakes or volcanic eruptions at least to those organizations in the path of these Government oversight tidal waves. What tidal waves you may ask? Well, let’s look at two recent reports from the DOD IG very critical of DCMA; Report No. DODIG-2015-139 and Report No. DODIG-2016-001.
Those reports criticized, and we use that word lightly, DCMA’s ACOs for failing to:
- issue timely initial and final determinations,
- obtain or adequately evaluate contractor responses, and
- withhold a percentage of contractor payments.
The results in these two reports are the conclusions reached from the DODIG’s evaluation of more than 200 DCAA reports alleging significant deficiencies in various contractors’ business systems. They also came on the heels of an earlier DODIG study of a DCAA whistleblower referral that a DCMA ACO had failed to allow DCAA time to perform a follow-up audit of contractor corrective actions related to EVMS (Earned Value Management System).
We could focus on many flaws in the DODIG’s methodologies for review and reporting but that would merely detract from the ultimate conclusion drawn; the DODIG has determined that DCMA is remiss through inaction in performing its duty to ensure that users can rely on the data produced by contractors’ business systems. And DCMA HQ agrees and pledged to rectify the situation.
In this writer’s opinion DCMA will not suffer through another DOD-IG grilling like they have over the past couple of years. DCMA has updated and upgraded an analysis tool that will help it to timely identify reported deficiencies. This tool will also help to monitor those ACOs at the locations where the Business Systems clause is applicable and deficiencies have been reported. The purpose being to ensure that those ACOs take the appropriate actions within regulatory time frames. DCMA has also pledged to more fully train its ACOs on the appropriate measure when deficiencies are reported. All of this was clearly stated by DCMA’s Director in her response to the DOD-IG reports.
Now the tidal waves. At the very least ACOs will be mandated to disposition previously reported deficiencies. Tidal Wave One: expect most, if not all, of the deficiencies to be deemed significant and issuance of initial determinations of non-compliance. Tidal Wave Two: after the regulated deadlines ACOs will make final determinations with or without contractor responses. And this writer fully expects the vast majority of the business systems to be deemed inadequate. Then the biggest and most devastating, Tidal Wave Three: withholds. No ACO worth their salt and who has continued career aspirations will miss an opportunity to demonstrate their protection of the American taxpayer by curtailing payments to these devils incarnate (defense contractors) who would dare to submit billings from unreliable data. Right behind Tidal Wave Three will most likely come the major and crippling swells where contractors lose future business because their business systems have been deemed inadequate. Then more waves when both DCAA and DCMA actually start performing reviews over their cognizant systems. And on and on, the ripples keep coming.
I think you get the picture. DCMA has done none of us a favor by sitting on its hands (ignoring the regulatory time lines clearly stated in DFARS 252.242-7005). If appropriate and timely action had been taken on reported deficiencies, more reasonable and practical measures could have been taken back then as well as in the future. More ACOs might have been able to review DCAA findings and contractor responses and deem the deficiencies as insignificant or resolved. But the DODIG and DOD Management will now most likely take an aggressive approach to this issue. Who is the winner in all this? As with all Tsunami’s, nobody. Admirals will get their ships, Generals will get their planes and missiles, and DCAA/DCMA will get more resources that they may or may not need. And maybe the biggest loser of all, the American taxpayer, because of increased cost due to increased oversight to eliminate (typically) undefined risks originating from highly subjective interpretations of the ill-defined term, “significant deficiencies”.
