What is the difference between the DCAA and the DCMA?
Earlier this year I was asked to participate in a webinar to cover the difference between the DCAA and the DCMA as well as describe what each agency did. The audience was a group of companies that were Small Business Innovation Research (SBIR) award winners. I think this may get confused for a number of people that do business with the Federal Government and so worth a little time today to discuss. Both of these agencies originate from the Department of Defense and are primarily concerned with helping the Department of Defense handle their contracting business. So what are the differences?
The DCMA (Defense Contract Management Agency) is a specific component of the Defense Department tasked with working directly with contractors. Their primary responsibility is to insure the Government gets the best value for their dollar, the highest quality and on-time delivery. These tasks not only take place before a contract award but also take place during the contract performance period. Some of the primary responsibilities include:
- Before the contract award
- Advice to construct effective solicitations
- Identify potential risks
- Recommend potential contractors
- Write contracts meeting the needs of the government
- After the contract award
- Provide Contract Administration Services to the DoD
- Monitor contractor performance
- Product Performance
- Provide in-plant representatives for the military as well as other Federal buying agencies
- Contract Closeouts
The DCAA (Defense Contract Audit Agency) on the other hand provides two major service areas to the Department of Defense:
- Audit Services
- Preaward Audits
- Price Proposals
- Preaward Surveys
- Forward Pricing Labor & Overhead Rates
- Postaward Audits
- Incurred Cost/Annual Overhead Rates
- Floor Check
- Truth in Negotiation Act Compliance
- CAS Compliance & Adequacy
- Contractor Business System Audits
- electronic Data Processing
- Material Management
- Negotiation Assistance Services
- Fact finding & contractor information analysis
- Procurement liaison assistance
So as you can see, while both agencies support the procurement of goods and services for the Department of Defense, each has a unique mission. A very top level summary that helps me is to think of the DCMA as the Contract Administration group and the DCAA as the Accounting/Financial group. Sometimes I hear people confuse and think that the DCMA is auditing their accounting or financial system. In reality, the DCMA only is concerned with the financial system in that it is capable of producing a quality product, on time and within budget. Now that's not to say that there could be instances where the DCMA might see a concern and ask the DCAA for some help.
The final issue that I see a lot of is what people generically refer to as a DCAA Audit. Since there are so many different types of audits that the DCAA performs, it can be confusing when somebody asks if you have been audited by the DCAA. It pays to ask what they are referring to when asking that question. For instance, if a prime contractor is asking a sub if they have had their system audited by the DCAA, a pre-award survey may not be sufficient for what the prime is looking for. I hope this is somewhat helpful to those that are mildly confused.
DCMA vs DCAA Compliance
Due to surging interest in the DCMA, and the differences between a DCMA vs DCAA Audit (and even DCMA vs DCAA compliance to begin with), we would like to note that there are a number of resources available to contractors from ReliAscent. In addition to webinars which we will be holding annually, we have also released two popular white papers that relate to the DCMA and DCMA/Federal contract management related issues:
"Alphabet Soup: The DCMA vs. DCAA"
"Government Contract Change Orders 101"
Throughout the remainder of 2017, ReliAscent will also be releasing monthly white papers on DCMA-related content, including important topics including:
-Government Contract Change Orders 402
-Federal Government Contract Reviews
-Negotiating Your Subcontracts
-Contract Negotiations and the DCMA
For contractors and grantees that need DCMA-related services (contract management/administration, and property issues), we have a number of experts on staff that can help you today. Traditionally, when a contractor or grantee needs assistance from a company like ReliAscent with a DCMA-related issue, what they inevitably end up needing is help in one of these key areas:
1) Contract Administration and Support Services
2) Contract Closeout & Termination Services
3) DCMA/Government Agency Property Compliance: Compliant Property Systems, DCMA Audits, Standard Template Property Manuals
If you need help with a DCMA or DCAA Compliance related issue, or if you are not even sure what you need (but have an unresolved issue with the DCMA), please click the link below, and one of our experts will contact you to discuss: