Tuesday, January 15, 2013

Bang, bang, bang ...

...bang, bang, bang.  That hammering sound you hear is another nail in DCAA's coffin. DoD should just bury the corpse now and quit pretending that the Agency still serves a useful purpose. Let me explain.

Last Friday, January 11th, DoD's Under Secretary for Acquisition, Technology, and Logistics announced the establishment of enhanced proposal price analysis teams within the DCMA (Defense Contract Management Agency) organization. (See memorandum here). These teams have been designated as Integrated Cost Analysis Teams or ICATs. The "Integrated" aspect of the name is to exemplify the joint business and technical composition of these teams. The teams are entirely dedicated to the performance of proposal pricing and pricing process evaluation at major DoD contractors.

These teams, according to DoD, will have insight into contractor estimating systems and practices that DCMA gains from experience with major contractors. DoD hopes to leverage this inherent advantage and enhance DCMA's capability "to the maximum extent". ICAT assistance can vary from a full-up proposal pricing report, to a specified tailored pricing product that covers specific elements within a contractor's proposal.

This describes DCAA's role in the acquisition process a few years back. DCAA with its bevy of CPAs, auditors, and pricing experts, was the "go to" source for not only DoD pricing support needs but for all executive agencies. The Agency had the resources and were the "experts" on estimating systems, price proposal evaluations, indirect expense rates, labor costs, purchasing systems, and all those things that contribute to helping DoD be responsible stewards of taxpayer monies.

Along the way, DCAA lost its way. Fundamentally, the concept of auditing according to GAGAS (Generally Accepted Government Auditing Standards, or, the GAO Yellow Book) is not compatible with the nimbleness required to provide responsive and timely pricing support. The acquisition community needed field pricing support in thirty days. DCAA thumped its chest announcing that it would henceforth conduct only audits according to the Yellow Book and would not be pilloried into delivering an audit until all audit requirements were satisfied. "Fine", DoD said, "Stand on principle and we'll get our services elsewhere". So they did. They've been building up DCMA's capabilities for awhile now. This new policy is more evidence of the trend that has been continuing for the past couple of years of diminishing DCAA influence.

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