Well, our friendly DCAA auditors are back after the Government shutdown. On December 2, 2025, Defense Contract Audit Agency (DCAA) issued a memorandum to their auditors titled, “Actions Required for Assignment Due Dates Following Furloughs.”
What Does DCAA Have to Say?
The Department of War (DoW) Comptroller has granted DCAA an extension of the statutory requirement to complete incurred cost audits within one year of the date the government contractor submitted an adequate incurred cost proposal. The memorandum tries to make the point that the extension does not mean everything should simply slide to the right 43 days (the length of the shutdown).
DCAA management is asking its auditors to:
- Prioritize their workload to get back on track;
- Coordinate their new plans and due dates with customers;
- Engage with government contractors to ensure they can support the new plans;
- Get the new plans approved by management.
Granted, I am paraphrasing and taking a more positive spin on this.
And they make the point that DCAA headquarters has notified government contractors through their industry organization’s partnerships. For very large government contractors, that may be helpful, but I’m not sure the small businesses got much in the way of notification, at least not that I have heard.
What Do We Really Have to Look Forward to?
First off, any invested resources in helping the auditor understand how your system or processes work will have to be repeated.
If the auditor went on furlough, left you with a request for data, and you did not complete and send it, they are not going to be happy. Unhappy auditors can be very dangerous.
Auditors are likely to squeeze time out of their audit timeline by putting the squeeze on you. If they were giving you 10 days to pull data or submit a response, you are likely to get 3, maybe 5 days now.
The bad news: Do not expect your auditor to come in and be overly collaborative when coordinating with you. It is more likely you will get a briefing, if that, on the auditor’s plan.
As much as I like to put the blame on DCAA, the shutdown certainly was not their fault. The blame lies with our …. You are right, I should keep my mouth shut.
What Can or Should Government Contractors Do?
I know I only see the less reasonable side of DCAA and its auditors, for the most part. However, I am sure there are reasonable officers and auditors out there who want to be collaborative when coordinating with you. So, take the first step and request a meeting during the development of the new plans and see what you can do. In the end, audits are necessary, and you want them to be as productive and efficient as possible.
Staying Prepared for Post-Shutdown Audit Activity
As DCAA adjusts timelines and resumes audit activity, government contractors benefit from staying proactive, organized, and ready to align with revised expectations. Redstone Government Consulting supports government contractors by reviewing audit requests, helping develop timely and accurate responses, and assisting with follow-up when findings arise. Our team of experts works with government contractors to understand the Government’s requirements, implement adequate accounting systems, and interpret cost and reporting obligations. We remain ready to step in where needed, so your team can navigate audits with clarity and maintain compliance throughout the process.
John is a Director with Redstone Government Consulting, Inc. providing government contract consulting services to our clients primarily related to the DFARS business systems, CAS Disclosure Statements, and DCAA/DCMA compliance preparation, advisory, and defense. Prior to joining Redstone Government Consulting, John served in a number of capacities with DCAA/DCMA for more than 30 years. Upon his retirement, he was based in Texas as an SES-level Corporate Audit Director for DCAA, managing a staff of 300 auditors at one of the largest DOD programs. Professional Experience John began his career in the late 80s working in the Clearwater, FL audit office and over the next three decades he progressed through a number of positions within both DCAA and DCMA with career highlights as DCAA Program Manager at Ft. Belvoir, Chief of Technical Programs Division, Deputy Assistant Director-Policy, Director of the DCMA Cost and Pricing Center, the SES-level Lockheed Martin Corporate Audit Director, and Director of Integrity and Quality Assurance. John’s three decades of experience in performing and leading DCAA auditors and DCMA reviewers provides a wealth of expertise to our clients. John’s role, not only in the performance of audits, but also in the development of audit policy affords him unique insights into the defense of audit findings and the linkage of audit program steps to the underlying regulatory framework. He is an expert in FAR, DFARS, and other agency acquisition regulation, as well as a subject matter expert in the Cost Accounting Standards having reviewed and provided audit feedback on many of the largest and most complex cost accounting practices during his tenure with the DCAA. John’s tenure with DCAA and DCMA came at a critical time during each agency’s history where a number of changes were occurring such as the response to the ICS backlog, development of audit approaches to the DFARS Business Systems and implementation of new audit initiatives as a result of Congressional oversight through the NDAA process. John’s leadership at the DCMA Cost & Pricing center saw oversight of all major DOD pricing actions, leadership of should cost review teams, the Commercial Pricing group and many other areas of strategic value to our clients. His involvement in these and other Agency initiatives is of great value to our clients due to his in depth understanding of DCAA and DCMA’s internal policy directives. Education John holds a Master of Business Administration and a B.A. in Accounting from the University of South Florida. Certifications Certified Information Systems Auditor State of Alabama Certified Public Accountant