Many of our clients have noticed a "different" DCAA recently. Other clients have noticed that there is a difference in their subcontracts with major primes. All of them don't understand how they could have been doing the same type of contracting in the past without this type of scrutiny and why has that changed? Well, we have to go back about 18 months. The DCAA was audited by the Government Accountability Office (GAO) and found to have errors in their audits. A second review by the GAO disclosed further and more widespread problems. Then the Senate got involved (Homeland Security and Government Affairs Committee) and the DCAA came under close scrutiny. Shortly thereafter, the head of the DCAA was dismissed. To make a long story short, the DCAA has come under intense scrutiny and criticism over the last 18 months. Many changes have been implemented at the suggestion of everyone in authority. Ok, but what does that mean? It means that the DCAA's reaction is also severe. The DCAA is following all the regulations (FAR, CAM, GAGAS, and more) to the letter. As a matter of fact, some of the GAO criticism and Senate committee criticism centered on the fact that DCAA supervisors over-rode auditor findings and recommendations. Other findings centered on audits being done too fast without focusing on the quality of the audits. The DCAA response is obviously to hire more auditors so that they won't fall further behind, while doing more thorough audits. The other obvious change is that DCAA audit supervisors are resistant to over-ride an auditor's finding. Well, if the auditor is not using common sense or is just "off-base", it is not getting thrown out like before. Likewise, previously the DCAA auditor would provide an audit report that "passed with some recommendations". Today the contrator either passes or fails the audit, no more intermediate grades. This means compliance is harder, especially for smaller businesses. This trend is likely to continue for some time. Contractors will find it more difficult to comply with all the rules, especially if they are not fully accustom to the government regulations. Government contracting is becoming more difficult. Most contractors either need to have an "expert" on staff or they need to outsource expertise to insure compliance.
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