After the February 1st HSGAC Contracting Oversight Subcommittee hearing, the DCAA director, Patrick Fitzgerald has been on a media campaign to tout all the new changes he has implemented and how they have improved the quality of DCAA audits. According to Fitzgerald, DCAA has saved about $3 billion with a “tightened net” which focuses on singling out defense contracts which are considered high-risk. About these “real savings,” Fitzgerald said, “I mean there’s a lot of numbers thrown around sometimes, but these are savings determined by […]

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To get the New Year off to a frustrating start for government contractors, Shay Assad, Director of the Defense Procurement and Acquisition Policy (DPAP), released a memorandum called: “Better Buying Power: Guidance for Obtaining Greater Efficiency and Productivity in Defense Spending; ‘Align Defense Contract Management Agency (DCMA) and Defense Contract Audit Agency (DCAA) Processes to Ensure Work is Complementary” Just reading the name of this memorandum was painful enough but then it went on to discuss actions, which have been implemented for a better working […]

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Do you remember back in 2008 when the Government Accountability Office gave a very critical review of the DCAA audit practices? DCAA was told to be more independent. Now, several years after DCAA criticism, government contractors are finally going to start feeling the effects. Instead of DCAA acting as a friendly business partner with contractors, DCAA is taking the remote, big-brother approach. In the past, DCAA would point out all the various deficiencies in systems, internal controls and processes that government contractors are subject to. […]

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Contracting officers request a Preaward Audit in order to understand the accounting system which is being used by a government contractor. Many government contractors are stupefied to find out that their accounting system isn’t adequate, even if the books are being meticulously kept. For the DCAA, it isn’t enough just to keep good records though. The DCAA wants to make sure that government contractors are keeping accurate records in a reliable manner. The DCAA Preaward Survey will be looking at the government contractor’s accounting in […]

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DCAA auditors are not just looking to see if a contractor’s accounting system meets a checklist. The DCAA auditor takes under consideration the Generally Accepted Accounting Principles, or GAAP, and will perform various tests to make sure that the accounting system is in accordance. Here are the areas that a DCAA auditor will be looking at: Controls It is crucial that a contractor have full control to direct charging of all indirect expenses and vice versa. It is very helpful if the contractor can show, […]

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Your DCAA timesheet may be one of the most demanding tasks when it comes to surviving an audit.  However, it isn’t enough for just you to understand the DCAA timesheet regulations.  Many firms fail audits because of problems their employees make.  This can be avoided with a good training program. The first thing that employees need to understand about their DCAA timesheets is that they, the employees, are responsible for them.  No one else is allowed to fill in his or her timecards.  After clocking […]

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Talk about government reform is sure to make you groan, especially when in regards to DCAA regulations.  It is hard enough to grasp these DCAA regulations without the added challenge of continual changes in policies and procedures.  As contractors, what we need to remember is that the DCAA is not just a scrutinizer, but is also under constant scrutiny.  Groups such as The Project on Government Oversight (POGO) are urging the Senate Armed Services as well as Homeland Security & Governmental Affairs Committees to step […]

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When reviewing a DCAA proposal, auditors are to look for 11 deficiencies as outlined in The Defense Contract Audit Manual.  To help you understand why a DCAA proposal might be denied, we have listed the 11 deficiencies here and described their meaning: 1. Unsupported Costs: This means that your DCAA proposal did not contain enough documentation to determine whether that cost is allowable or not.  For cost estimates, this can become a problem because the estimate hasn’t occurred yet.  Many auditors will keep the standard […]

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There are many different types of DCAA software out there covering many different aspects of the audit, including timekeeping and accounting.  Even though you may detest DCAA as a contractor, you should not forget why it exists. The DCAA is necessary to ensure that the government is not spending taxpayers’ money on frivolous expenses or unnecessary costs. The reason that DCAA software is so important in the audit process is because it shows DCAA that your company is professional and organized.  It would be embarrassing […]

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Contract disputes are a part of the contract process – it just seems to happen and be a part of the process.  The parties involved shake their heads in wonderment while questioning how the dispute began in the first place.  Before you know it people are assigning blame, lots of fingers are being pointed, voices are rising, and tempers are flaring and fear is growing that the contract will be lost for not meeting the contracts agreed terms.   This type of stress can quickly hamper […]

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