DCAA Audit / DCAA Compliance Consulting

The Government employs a small army of auditors to ensure the public receives fair and reasonable prices for the products and services it buys.  The premier audit agency is the Defense Contract Audit Agency (DCAA) where other federal, state and local agencies may use other auditors whose level of knowledge varies widely.  Our DCAA consulting activities closely mirror the types of audits contractors will face from DCAA – forward pricing proposals for all types of contracts, provisional billing rate proposals and incurred cost proposals affecting cost reimbursable contracts, special audits for terminations, requests for equitable adjustments and claims and system audits addressing contractors’ accounting, estimating, materials management, purchasing and earned value management practices.

Though, ideally, clients contact us to ensure their practices will be accepted before there are adverse DCAA audit findings we commonly are engaged in our DCAA consulting activities after a negative finding has surfaced.  Questioning unallowable costs on forward pricing proposals, incurred cost submissions or claims and terminations put forth by DCAA can be very expensive to contractors, not to mention the imposition of penalties on certain unallowable costs.  In addition, adverse DCAA audit findings of inappropriate cost allocation practices, inadequate accounting, estimating, purchasing or EVMS systems can also result in failure to be awarded contracts, suspension of payments or hefty penalties.   Sometimes adverse DCAA audit findings are justified, sometimes clearly unjustified and much of the time quite gray.  Justified DCAA positions should be identified, clearly unjustified positions should be challenged with the intention of eliminating the effect while gray areas can be significantly mitigated if handled correctly.

Our staff is uniquely qualified to provide DCAA consulting services.  The majority of our staff are former DCAA auditors and managers who have in depth understanding of the way auditors do business.  We have mastered the rules, regulations, decisions and guidance followed by auditors which allows our DCAA consulting engagements to bring considerable grounds to challenge adverse audit positions.  Our staff has published over 100 articles addressing DCAA guidelines, approaches and methodologies.  In addition to our use of former DCAA auditors, our DCAA consulting engagements bring together former contracting officers and administrative contracting officers as well as actual members of CPSR and EVMS government audit teams.  Our unique ability to provide extensive expertise in areas audited by DCAA allows us to both prevent adverse DCAA opinions or if we are engaged to address adverse DCAA opinions, to resolve issues to achieve the best possible outcomes.

Examples of our DCAA consulting services include:

• Evaluations and “mock audits” of client’s accounting, estimating, purchasing, EVMS systems and recommendations for “fixes.”
• Evaluations of selected areas such as timekeeping, indirect cost rates, accounting software, internal controls, written policies and procedures, etc.
• Assessment of an adverse audit finding, usually at no charge
• If the adverse audit finding is not justified, developing a strategy for challenging the audit finding
• Drafting position papers defending contractor’s practices and challenging audit assertions
• Negotiating with audit management and contracting personnel to reach an acceptable settlement