DCAA "Slowness" Cost a Company a Contracting Opportunity

Back in June 2016, GSA (General Services Administration) issued a solicitation to procure IT services for various Governmental agencies. It was a multiple-award ID/IQ contract where awardees under the solicitation would become eligible to receive task orders under the contract.

One of the conditions that bidders needed to establish was the adequacy of their cost accounting systems (CAS). Bidders could provide evidence from DCAA (Defense Contract Audit Agency), DCMA (Defense Contract Management Agency) or another Cognizant Federal Agency. One of the bidders, Dynanet Corporation did not have such evidence so GSA requested DCAA to perform a pre-award accounting system survey.

On August 12, 2016, DCAA acknowledged GSA's request for the review so sometime after that, DCAA initiated its review.

Proposals were due to GSA on October 7th but by then, DCAA had not completed its audit. That was nearly two months after the audit request and should have been plenty of time to complete these rather perfunctory reviews. Two days and the day before proposals were due, Dynanet frantically communicated with DCAA as to the report status. Dynanet pleaded with DCAA, if they were not able to issue a report, to provide them at least a letter to the effect that their cost accounting system was adequate.

DCAA refused saying that the audit had to be reviewed by a supervisor and would be issued the following week. DCAA did issue the report the following week, October 14, 2016 and found Dynanet's accounting system to be adequate for Government contracting. But by then, it was too late. GSA deducted points from Dynanet's bid because the proposal did not include evidence that the accounting system had been approved by DCAA. That point reduction was enough to reduce Dynanet's score below the award cutoff. Specifically the contracting officer noted that Dynanet

did not provide evidence of an acceptable accounting system that has been audited and determined adequate for determining costs applicable to the contract. [Dynanet] provided a letter from DCAA dated August 12, 2016 that simply indicated that an audit request has been received. [Dynanet] also provided an [email] string from DCAA dated October 6, 2016 (one day before the [bidding window] closed) where [the DCAA] stated that the audit was in its final stages with a goal of having it completed by October 14, 2016 (7 days after the [bidding window] closed).

Dynanet appealed but that appeal failed (see CFC 18-795C) because the contracting officer had evaluated everything in strict accordance with the solicitation.

If only DCAA could have published its report one week sooner, Dynanet might have had a contract.