DoD's Fiscal Year 2014 Budget Overview - DCAA and DCMA

Earlier this month, the DoD released its Fiscal Year 2014 Budget Request to Congress. This is only a request and things will change once Congress begins its deliberative process. We were interested in finding out what the Department had in mind for DCAA (Defense Contract Audit Agency) and DCMA (Defense Contract Management Agency) staffing-wise and whether any of their roles were expected to change.

DoD is proposing to grow both organizations. For DCAA, the Department is proposing to add 332 new auditors on top of the 563 new auditors it is hiring this year. That's almost 900 more auditors than were running around last year (about a 20 percent increase). According to DoD, the additional staffing is needed to reduce the incurred cost backlog:

In FY 2014, the DCAA will assign additional auditors to reduce the incurred cost review backlog. Reducing this backlog will: (1) assist in achieving auditable financial statements; (2) provide the DCAA with data needed for forward-pricing audits; (3) prevent undue delays in payments of fees to contractors (a portion of fees to contractors is delayed until the contract is closed).

For DCMA, DoD is proposing to add 347 new positions to the whopping 1,628 positions it is adding this year (FY 2013). This represents a 22 percent increase in staffing over the two year period. According to DoD the additional staffing is needed to improve oversight:

In FY 2013, the DCMA continues the Department's efforts to grow the acquisition workforce, in order to mitigate known acquisition oversight workforce shortfalls, primarily in the areas of price costing, earned value, and quality assurance.

We don't know if this is good news or bad, from a contractor perspective. On one hand, there is a lot of money being withheld by the Government pending completion of very old incurred cost audits. On the other hand, increased oversight by DCMA is certain to cause some friction.