Defense Contract Audit Agency

Pursuant to the Truth in Negotiations Act (TINA), contractors are required to submit current, accurate, and complete cost or pricing data when negotiating certain contracts with the Government.  On November 20, the Department of Defense (DoD) published a proposed rule to amend the Defense Federal Acquisition Regulation Supplement (DFARS).  The change would require DoD contracting officers to request a limited-scope audit if a contractor voluntarily discloses defective pricing,[1] unless a full-scope audit is “appropriate for the circumstances.”  In theory, if the rule is implemented, contracting officer would have the flexibility to focus an audit on the defective portions disclosed by the contractor and not reexamine all previously provided pricing data.  Though the proposed rule appears to be DoD’s attempt to provide limited relief to defense contractors facing significant regulatory burdens under TINA, it is not clear the rule as written will provide any such relief.
Continue Reading DoD Proposes DFARS Changes in Attempt to Promote Voluntary Disclosure of Defective Pricing

The Defense Contract Audit Agency (DCAA) recently issued its Fourth Annual Report to Congress dated March 25, 2015. Once again, the report shows DCAA is making modest improvements in the timeliness of its audits, and continues to seek regulatory changes that would provide DCAA greater access to contractors’ data, internal audits, and personnel.

Congress began requiring annual reports from DCAA in 2011 following well-documented and widely reported criticisms of DCAA that ranged from allegations about failure to comply with professional standards, questions about the timeliness of audit reports, and the well-publicized increased backlog of incurred cost proposals requiring audit. Section 805 of the 2012 National Defense Authorization Act requires DCAA to submit an annual report by March 30th of each year. Each report must provide statistics on DCAA’s audit performance during the previous fiscal year and address “Significant Deficiencies and Recommended Actions to Improve the Audit Process.”Continue Reading DCAA’s 4th Annual Report to Congress Will Look Familiar to Many…