Problems and Reforms Facing DCAA

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 up their supervision of DCAA.

There are many problems within DCAA, which were addressed by congress in early 2010.  However, the DCAA reforms which resulted after considerable criticism of DCAA have failed to change any of the problems.  This means that we can expect more DCAA reforms in the future, which will undoubtedly cause more complications for contractors.

Some of the biggest criticisms with DCAA are with managers of auditors.  Many auditors allege that DCAA is a hostile workplace.  There have been allegations of DCAA managers changing audits because of friendly relationships with the contractors.  Since there was no way to hold these DCAA managers accountable for their actions, the agency decided to create a hotline where auditors could report abuses.  However, this hotline reports all findings back to the region or manager.  Obviously, an abusive manager is not going to hold him or herself accountable for irresponsible actions.

There have also been theories that DCAA promotes employees based on loyalty to managers, not because of dedicated work that reduces unnecessary spending.  Even though there has been a call for grassroots organizations to investigate the internal workings of DCAA hiring and promotions, the DCAA headquarters has been resistant.

These sorts of problems with DCAA are not new and complaints about corruption go back decades.  Real DCAA reform may not be possible so long as the agency is within the Department of Defense.  There has been a call for an independent auditing agency for federal contracts.

So, how do DCAA problems and reforms affect you as a federal contractor?  The suggestion that managers are playing favorites with contractors is a big concern to smaller firms looking to win government contracts.  It will be even more difficult to compete against larger companies if those companies are giving managers bribes.  While you tire away trying to fill out your DCAA timesheets correctly, an auditor for a large company is looking the other way while sharing drinks with the contractor.

Now that DCAA management is obsessed with documenting the auditor’s steps, there is less focus on the actual contractor costs.  Instead of DCAA being about accountability and stopping overspending, the audit process becomes more a systematic procedure of steps which aren’t applicable for GAGAS.  It seems like the senate house will continue applying pressure on DCAA to make reforms.  Hopefully, this means that contractors can expect to be awarded bids on the strength of the proposal rather than just friendly relationships with DCAA managers.