On September 5th, DCMA issued a letter to the National Defense Industrial Association (NDIA) addressing industry concerns raised at a meeting with DCMA on April 25, 2013. We will highlight some key points in the letter that will help contractors deal with DCAA’s assertions which often times are not supported by regulations. The letter reinforces that it is DCMA that determines if a contractor’s business system is compliant or not and if a Corrective Action Request (CARs) is necessary.
Topics: Contracts & Subcontracts Administration, DFARS Business Systems, DCAA Audit Support, Contractor Purchasing System Review (CPSR)
With a Congressional FY 2014 appropriations bill unlikely to be approved before midnight, September 30, 2013, government agencies and the contractors that perform services for those agencies, particularly the Department of Defense, will be immediately constrained in their ability to continue operations due to the absence of approved funding.
Topics: Government Shutdown
I recently watched an amazing video of an F-16 fighter jet being flown without pilots. Watching this video helped me figure out what’s wrong with DCAA. This fighter jet flew and worked properly without a pilot. Unfortunately, DCAA HQ has been without pilots for quite some time but unlike the F-16 the audit agency can't do its job.
Topics: DCAA Audit Support
The National Defense Industrial Association’s (NDIA) September Procurement Division Committee meeting provided insights and information that we believe is of interest to our readers. These comments are our own interpretations and opinions based upon our presence at the meeting.
Topics: Compliant Accounting Infrastructure, Sequestration, Proposal Cost Volume Development & Pricing, Contracts & Subcontracts Administration
Dealing with DCAA audits can be tricky at best - especially in today’s environment, if you do not take the necessary steps to ensure that you understand, manage and respond appropriately to audits. In this brief article, we will look at what steps can be taken by contractors prior to, during and after a DCAA audit.
Topics: Contracts & Subcontracts Administration, Government Compliance Training, DCAA Audit Support
On August 13, 2013, the Federal Register included a proposed rule to reduce the contractor response time (for comments on past performance ratings) from 30 to 14 days. The change is a required reform (i.e. Congressional expectation) to improve contractor past performance databases; per the rule writers, it will “improve communication with contractors, access to performance information within the government and procedures selecting high performing contractors” and “having this data available within 14 days will be to the advantage of most contractors”. Not that it matters, but this strikes us as a meaningless and inconsequential change (to placate Congress) which will do nothing to improve the timeliness of the acquisition process. Moreover, just one more example where contractual due dates are imposed on contractors (who are then held to these due dates) when few if any due dates are contractually imposed on government auditors or contracting officers. Notably when FAR 52.216-7 was revised in May 2011, public comments suggested that with respect to the annual indirect cost rate proposal (contractor due date for submission is six months after the end of the contractor fiscal year) it also include due dates for incurred cost audits to facilitate contract closeout—in their infinite (and biased) wisdom, the rule makers stated that government due dates would be inappropriate because such due dates might impact the quality of the contract audits. Which begs the question, how does one measure audit quality when DCAA completes so few incurred cost audits?
Topics: Incurred Cost Proposal Submission (ICP/ICE), Contracts & Subcontracts Administration, DFARS Business Systems, DCAA Audit Support
One of the primary goals for a contractor notified of an impending Defense Contract Audit Agency (DCAA) audit should be to understand the audit process and, if possible, to develop a positive working relationship with auditors. In other words, to work with rather than against the auditor.
Topics: Compliant Accounting Infrastructure, Contracts & Subcontracts Administration, DCAA Audit Support
“My DCAA auditor is telling me I’m now subject to CAS. What does that mean? What do I do?” We get questions like this almost every day. Usually we then obtain as much information as we can to determine why DCAA has made this claim and advise our clients accordingly.
Topics: Contracts & Subcontracts Administration, DCAA Audit Support, Cost Accounting Standards (CAS)
Government contractors who are required to submit certified cost and pricing data as part of a bid proposal face increasingly greater risks of government rejection or award disqualification during pre-award review or even worse, defective pricing allegations after award causing government mandated downward negotiated price adjustments. In today’s government procurement environment where procurement commands and their auditors hold contractors to solicitation and cost analysis provisions with such rigidity, equating to a zero error tolerance during proposal evaluations, contractors must not fail to meet the “certified cost or pricing data” submission or disclosure expectations in the pre-award proposal preparation process as intended within the Truth-in-Negotiations Act (TINA).
