Defense Contractor Audits Decline
Tuesday, November 30, 2010
To hear the Defense Contract Audit Agency (DCAA) tell it, the reason why it is conducting far fewer audits these days is because of an emphasis on quality over quantity. Whatever the rationale, DCAA’s productivity has really dropped in the last couple of years.
In fiscal year 2007, the agency performed 25,547 reviews of contracts with defense companies. Two years later, the number plummeted to 16,213 audits, and in FY2010, it dropped again to 11,746.
“The decrease in audits over the last few years is largely due to an increased emphasis on quality and implementing additional audit procedures,” said a DCAA spokeswoman.
Future audits will probably be reduced further due to the agency’s October 18 decision to review only contracts that meet a certain cost threshold. Fixed-price contracts with a value of $10 million and above will be examined, as will “cost-type proposals” worth $100 million or more. Prior to this decision, there was no threshold for fixed-price contracts and the level for cost-plus contracts was only $10 million.
Backlog Results in Fewer Defense Audits (by Jill R. Aitoro, Washington Business Journal)
DCAA Defends Tighter Scope on Audits (by Alice Lipowicz, Washington Technology)
Pentagon Radically Reducing Oversight of Contracts Worth Tens of Billions (Project on Government Oversight)
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