Government Contractor Top 5 Wish List for DCAA’s New Director

Recently DCAA’s Director, Pat Fitzgerald, announced his retirement effective August 4, 2014.  In addition to announcing his retirement, he very graciously thanked the DCAA community for their collective efforts to “clearly improve our audit quality and workforce morale, as well as the value we are adding to the warfighter and taxpayer”.   In addition, Mr. Fitzgerald assured the DCAA workforce that “we have established a foundation to make additional improvements to ensure that we continue to provide exceptional service”.

Not to diminish Mr. Fitzgerald’s accomplishments or his encouraging words to the DCAA workforce, we have performed a non-statistical and highly selective survey of consultants to government contractors to obtain the top 5 (wish list) of characteristics and/or strategies that a new DCAA Director should bring to the table.  In no particular order:

1. DCAA’s Director should be familiar with FAR and CAS which might translate into audit policies which are based upon actual contract terms and conditions as opposed to audit policies which are based upon DCAA’s preferred, but hypothetical contract terms and conditions.
2. Audit policies which prohibit auditors from rejecting contractor proposals (incurred cost, bid proposals or rate proposals) for highly subjective and inconsequential reasons, an abusive tactic which has unnecessarily delayed the acquisition process solely to facilitate DCAA’s blame-game (shifting the blame (to contractors) for DCAA’s inability to timely audit).  Auditors should be re-taught “Auditing 101” which is based upon gaining an understanding of the contractor’s assertions as opposed to repetitively rejecting contractor assertions (proposals) solely because of formatting (hundreds of thousands of hours/millions of dollars have been wasted for nothing more than reformatting).   Similarly, auditors should audit the contractor data/documentation as opposed to creating documentation requirements supported only by the personal preferences of the auditor (i.e. not explicitly required by any regulation).
3. Audit policies which are modified in consideration of ASBCA and Court of Claims decisions as opposed to DCAA audit policies which pretend that an unfavorable decision never happened (reference to ASBCA decisions regarding adequate documentation, decisions highly critical of DCAA benchmarking for compensation reasonableness as well as decisions invoking the six year statute of limitations in FAR 33.206).
4. Audit policies which focus on efficient audits using minimal numbers of competent auditors as opposed to bloated audits involving multiple auditors (“teams”) as if a single auditor and supervisor can’t be trusted to competently perform/supervise an audit.   Correcting this will free-up hundreds of thousands of audit hours to efficiently and effectively perform more audits instead of DCAA’s strategy of blaming declining resources as the reason for removing thousands of audits from DCAA’s responsibilities (for what it’s worth, DCAA’s resources have increased significantly from 2008 through 2014; however, the “declining resources” is DCAA’s secret code to mask the fact that audit resources to perform any particular audit have typically increased ten-fold).   
5. Annual reporting (Year in Review and/or Annual Report to Congress) which is subject to independent audit verification and some authoritative reporting standard as opposed to annual reporting which is unaudited, misleading, and self-serving as evidenced by self-aggrandizing statements for favorable results, while attributing unfavorable results on circumstances beyond DCAA’s control.