Tag Archives: DoD

DCAA Reports to Congress on FY2016 Activities

DCAA FY2016 activity report

The Defense Contract Audit Agency’s (DCAA) effort to realign resources and reduce overall audit backlog is certainly paying off. The results of the DCAA’s FY2016 activity report are out, and the numbers tell an uplifting story for government contractors. Below are a series of key findings the agency has released to Congress.

  • The DCAA’s workforce of 4,513 employees issued over 4,200 audit reports. The agency examined $287B in defense contractor expenses, resulting in $9.9B in exceptions.
  • Officials saved $3.6B in defense spending during FY2016 related to DCAA audits. The agency was able to gain efficiencies by completing multi-year incurred cost audits as opposed to single-year audits, saving approximately 40% of their time.
  • Staffing shortages in FY2016 reduced the numbers of total years closed for incurred cost submissions when compared to FY2015. However, the dollars examined increased 20% from FY2015. Through a risk-based audit approach, the DCAA was able to target their audits.
  • The time to complete an incurred cost audit, based on the start date, has decreased from 406 days in FY2012 to 138 days in FY2016.
  • The average incurred cost backlog is now 17.6 months or 4,677 submissions. The current government hiring freeze has made the projected backlog elimination in FY2018 unknown.
  • In FY2016, pre-award audits were completed in half the time (60 days) compared to FY2012 (120 days). In FY2012, the pass/fail rate was approximately 78%/22%, and in FY2016 the pass/fail rate was 90%+/<10%. The shift of more contractors passing the pre-award audit can be attributed to educating small businesses on the necessary components of a passing system.
  • The organizational structure of the agency has been realigned to be more effective, including four Corporate Audit Directorates for major defense contractors, three Regional Directorates for mid-sized and small defense contractors, and one Field Detachment for classified work.
  • The DCAA continues to prioritize audits based on risk. Higher risk audits have the highest payback to warfighters and taxpayers. These types of audits include forward pricing, special audits and incurred costs audits.
  • High-risk audits include significant dollars and poor past performance by the contractor.

Overall, the DCAA has reduced audit spending, audit backlog, and time completing an audit from start to finish. The agency has achieved this by incorporating a risk-based audit approach, improving agency and cross-agency communications, and implementing community outreach programs. Their 2016 activity report confirms that the transformation of the agency is alive and well.

For any questions, please contact La-Tasha Patel at 301.231.6260 or lpatel@aronsonllc.com.

Can the Department of Defense Make Bold, Radical Changes to its Acquisition Process?

commercial item acquisition

Is commercial item acquisition the pathway for the Department of Defense (DoD) to fulfill its goal of having better access to the latest technological advances, and do DoD’s current acquisition rules and regulations hinder that goal?

Do commercial contractors think selling to the Federal Government, particularly to the DoD, is a worthwhile endeavor?

Are there too many DoD procurement regulations; and are the current regulations relevant?

A body of experts commissioned by Congress in the FY16 National Defense Authorization Act (NDAA) is addressing these questions and more.  

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Timing is Everything – GAO Refuses to Apply Jurisdiction Retroactively


As we previously reported here and here, between October 1 and December 14, 2016, the Government Accountability Office (GAO) lacked jurisdiction to hear most civilian agency task order protests (its jurisdiction over protest of Department of Defense (DoD) task order awards was unaffected by the lapse). On December 14, President Obama signed legislation reinstating GAO’s jurisdiction over protests of civilian task orders greater than $10 million.  He subsequently signed the National Defense Authorization Act (NDAA) of 2017, which raised the threshold for DoD task order protests from $10 to $25 million.

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What’s on Tap for the DCAA in 2017?

What’s in store for the Defense Contract Audit Agency (DCAA) in Fiscal Year (FY) 2017 you may ask? At a recent NCMA dinner, there were a number of key points discussed by the Director of DCAA that contractors should pay close attention to. Areas of focus included strategic priorities in FY2017, the outcome of the FY2016 National Defense Authorization Act (NDAA), and interests of the DCAA in the FY2017 NDAA.

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DoD Launching New Website to Help Industry Comply with Independent R&D Disclosure Rules

revenue recognition

By Federal News Radio

In what appeared to be a response to industry complaints that new Defense Department rules would disincentivize companies from embarking on new research projects on their own initiative, the Pentagon is developing a new web portal to make it easier for firms to let the government know about their independent research & development (IR&D) activities.

At issue is a final rule DoD published in November. Reasoning that the government needs more insight into the more than $4 billion in reimbursements it issues to contractors for IR&D projects each year, DoD required large firms to hold a “technical interchange” with at least one DoD official before starting work on a R&D project — at least if they wanted to be reimbursed for their allowable costs.

Continue reading at Federal News Radio

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