On April 21, 2014, the DAR editor submitted a proposed new DFARS rule (DFARS Case 2012-042) for Business Systems Compliance to OMB’s Office of Information and Regulatory Affairs (OIRA). Generally, this is the last step prior to the publication of the new rules. The full body of the proposed rule has not been published; however, OIRA has published the following abstract on May 23, 2014 as part of its semiannual compilation of all pending federal regulations:
Topics: Compliant Accounting Infrastructure, Small Business Compliance, Government Compliance Training, DFARS Business Systems, DCAA Audit Support
Robert Eldridge and Michael Steen, Director and Senior Director of Redstone Government Consulting, have been selected to speak at the prestigious National Contract Management Association’s World Congress (NCMAWC). This annual training event for contract management, procurement and acquisition professionals is the largest training event of its kind and will be held at the Gaylord National Hotel and Convention Center in Washington D.C., from July 27-30.
Topics: Small Business Compliance, Government Compliance Training, DCAA Audit Support
In responding to contractor criticisms that DCAA has far too many criteria within their “adequacy checklists”, DCAA has now developed and is pilot testing a new adequacy checklist which involve the same criterion, but each criterion is individually weighted to yield a true risk and materiality based adequacy determination. Additionally, in developing the weighted criterion, DCAA has implicitly acknowledged that contractor proposals do not have to be 100 percent adequate to be auditable.
Government contractors having undergone DCAA incurred cost proposal audits during this past year have learned several important trends and lessons, some of which will likely continue into 2014, and produce added administrative hardships for most contractors. Some initiatives undertaken by DCAA in conjunction with the DCMA may mitigate the level and duration of audit effort and hasten contract close-outs for some contractors. For example, more contractors will most likely be subject to low-risk determination criteria and expand the number of companies who could escape those audits.
Topics: Incurred Cost Proposal Submission (ICP/ICE), Small Business Compliance, Government Compliance Training, DCAA Audit Support
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)
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
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)