Week 3 forum 423

Response question 1

DCAA is the Defense Contract Audit Agency, they serve as an advisory agency for the contracting officer and they help to protect the taxpayer from fraudulent use of tax dollars. One way they do this through conducting several different types of audits. A pre-award audit that is done prior to the contractor being able to be awarded a contract. This audit looks at the accounting practices and set up that the contractor uses to be sure they meet the standards set forth in the Contract Audit Manual (CAM). These standards come from the FAR, DFARS and Generally Accepted Accounting Principles or (GAAP). The goal is to have an accounting system that is able to function and be audited if need be in the future (Ormsby, 2017).

The DCMA is the Defense Contract Management Agency and is a DoD component that works directly with contractors not only before, but during the contracted work. Their over-arching mission is to ensure that the Government gets the most bang for the buck on their contracts. This is measured through both the cost and the quality of the product or services provided by the contractor as well as on time delivery. Some of the services the DCMA provides are recommendation of contractors with good previous results, identifying and minimizing risks in programs, assisting in writing solicitations and contracts. Then once awarded they administer contracts, monitor contract performance, and assist the KO with contract closeouts (Ormsby, 2017).

One of the things that the DCAA does is called a “Floor Check”, where they arrive unannounced on a job site and audit the timekeeping methods and records (Ormsby, 2017). During a similar type of check it was found that in Iraq there was a fair amount of fraud in the dining facility contract for KBR. Essentially it was discovered that meal cards were scanned at a very high rate, one card was found to be scanned 25 times in a 48 hour period for example. Each scan came with an amount of billable money under the contract. The final DCAA report found a headcount inflation of as high as 36 percent. In another incident with the same contractor the DCAA found a $61 million overcharge on a different contract to rebuild oil refineries in Iraq (Weinberger, 2014).

Question 2

The Defense Contract Audit Agency (DCAA) is responsible for providing audit and financial consulting to the components of the Department of Defense as well as other federal agencies. It was in the 1960’s that the federal government recognized that there needed to be more uniformity amongst its contracting practices. Rather than having each DoD component preform their own contract audits, functions and regulations the Secretary of Defense came in and conducted studies to determine the best way to promote consistency with matters pertaining to contracting. The result was the creation of the DCAA. Below the direction of the Under Secretary of Defense this agency aims to effectively audit and service federal acquisition contracts.

Today the agency faces great challenges. One of the questions this week asked if the DCAA faces a backlog and the answer is a definitive yes! A backlog cost audit delays contract closeout, often by a couple of years. What this means is that contractors must wait to receive the final 5-10% of their payments owed to them on a contract (often a cost reimbursement contract). When you think about it that is often the profit, therefore these contractors are force to perform on a contract and not reek the benefits for far too long.

This can be attributed to the new administration’s policies. In a time when the agency is working to catch up by planning to hire about 100 new auditors a month the administration implements a hiring freeze. But this problem was there for before the new administration came in. Currently there are increased to the budget of the DCAA by the new administration and that should hopefully combat some of the problems faced.  

The new administration has some very good yet ambitious goals for the entire Defense budget. Currently the guidelines are that for every 1 new regulation that an agency wants to implement it must remove 2 old ones. That seems reasonable as it can help clear some of the ambiguity and redundancy that federal agencies are known for. This “one-in, two-out” policy on regulations is going to ultimately shape the way the DCAA conducts business but there’s no way of telling right now how effective it will be on the mission of the agency.