DOD auditors raise the limit on what they'll examine

The Defense Department has reduced the scope of contracts audited by the Defense Contract Audit Agency, according to a DCAA memo released today by the Project on Government Oversight, a watchdog group.

According to the memo, contracting officers' requests for DCAA reviews of contractor cost data must meet a threshold of $10 million for fixed-price proposals and $100 million for cost-type proposals, unless there are exceptional circumstances.

Previously, the threshold was $700,000 for fixed-price proposals and $10 million for cost-type proposals, POGO officials said in a post published on the organization's website.

Approximately $92 billion in annual DOD contracts will be affected by the new thresholds, POGO estimated, calling it a radical reduction in contract oversight by DCAA.

“POGO has long feared contractors and their government allies would block DCAA from exposing contractor ripoffs,” Nick Schwellenbach, POGO’s director of investigations, said today.“Why are billions of dollars being put at risk when [Defense] Secretary [Robert] Gates is demanding cost savings?”

DCAA officials were not immediately available for comment.