18th Annual Government Contractor Survey

For the past two years, we have provided summaries of the annual government contractor industry survey published by the accounting firm of Grant Thornton. The results of its 16th annual survey is summarized here and its 17th annual survey is summarized here. Grant Thornton recently published the results of its 18th annual survey and the highlights can be viewed here. Following are some of the survey summaries.

Resolution of contract issues

The trend is worsening  Only 18 percent of survey participants believe contract issues are resolved efficiently by the government. Last year it was 22 percent and the year before that, 26 percent. Of those reporting inefficiencies, 56 percent blame DCAA and 26 percent blame the contracting officer.

Relationship with DCAA

The majority of surveyed companies have an adverse opinion of the DCAA and its work product: 53 percent believe the DCAA's audit conclusions are arbitrary and not appropriately referenced to procurement regulations. Sixty percent believe that the DCAA is inflexible and rarely receptive to contractor rebuttals.

Fringe benefits

The fringe benefit rates reported in this survey are higher than any of the rates reported in the four previous surveys. It appears that the primary cause was, not unexpectedly, the increasing cost of health benefit plans.

Earned value management systems (EVMS)

41 percent of companies with EVMS reporting requirements indicated they consider it a cost-effective management tool. Only 34 percent of EVMS contractors ever receive meaningful feedback.

Business ethics and conduct

59 percent of the respondents believe that the requirements regarding codes of business ethics and conduct are excessive and not cost-effective.

Business systems

29 percent of respondents reported that they have made improvements to business systems as a result of the new standards. 33 percent have had one or more of their systems audited.