DCAA defends tighter scope on audits

Agency says it will save money and target higher-risk projects

Defense Department officials are defending the recent rise in dollar-amount thresholds at which the Defense Contract Audit Agency would conduct cost reviews, claiming that the higher thresholds will lead to expanded savings for the department.

The officials are responding to the release of a recent DCAA memo stating that for contracting officers requesting reiews, 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 thresholds were $700,000 and $10 million, respectively.

The Project on Government Oversight watchdog group called it a “radical” reduction in the contracts to be reviewed, saying about $92 billion a year in contracts would be affected.

But defense officials believe the change will focus resources on high-risk areas and increase savings to the department.

“Defense Procurement Acquisition Policy, in coordination with the acquisition community and DCAA, made the change to the Defense Federal Acquisition Regulation Supplement,” reads a statement distributed by a DOD spokeswoman on Nov. 1.

“DCAA is working with the acquisition community to align our resources with the highest risk areas. DCAA believes this change will allow them to focus on audit areas with the greatest payback to the taxpayer and will actually increase savings to the Department and warfighter. Finally, DCAA has coordinated this change with DCMA, and are confident that they will be able to provide the necessary pricing coverage for the procurements below the threshold," the DOD statement said.

About the Author

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.

Reader Comments

Thu, Nov 4, 2010

This change is extremely detrimental. Companies will have the ability to propose outlandish extreme costs and as long as they keep it under a 100 million they will never have to submit to an audit.

Wed, Nov 3, 2010

They stated DCAA is confident that they will be able to provide the necessary pricing coverage for the procurements below the threshold. However, specifics were not provided. This is big jump in price limits DCAA will be auditing. Will DCMA be auditing the proposals in-house for those that do not meet the new threshold? Will DCAA provide any input on those under the threshold?What about non-DoD proposals? Will DCAA be able to accept requests for audits for those proposals below the threshold if requested by a civial agency?

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