Is DCAA Going to Lose Some Work?

The Panel on Defense Acquisition Reform was appointed by Chairman Ike Skelton and then Ranking Member John McHugh in March 2009 to carry out a comprehensive review of the defense acquisition system. The review was motivated by a general sense among the members of the House Armed Services Committee that the Department of Defense’s (DOD) acquisition system was not responsive enough to today’s mission needs, not rigorous enough in protecting taxpayers, and not disciplined enough in the acquisition of weapons systems for tomorrow’s wars. The breadth of the problems that had recently come to light led members to conclude that a systemic examination was appropriate. The Panel took a year to perform its review, holding 14 hearings and 2 briefings covering a broad range of issues in defense acquisition. The Panel approved its interim report on March 4, 2010. The Panel received the Department’s1 views on March 11, 2010 and received additional input from the various stakeholder communities on the interim report prior to approving this final report on its findings and recommendations. The Panel issued its final report on March 23, 2010.

Among the many findings and recommendations the Panel expressed concern about the independence and effectiveness of the Defense Contract Audit Agency (DCAA). It recommended that DoD consider shifting responsibility for certification of contractor business systems outside DCAA or to independent teams within DCAA to avoid any conflict between DCAA's responsibilities for certifying the adequacy of contractor business systems and auditing the vouchers produced by those systems. To address this issue, two of the Panel members introducede H.R. 5013 which would require that business system reviews be "performed by an audit team that does not engage in any other official activity (audit-related or otherwise) involving the contractor concerned." Interesting.