Monday, May 5, 2014

Unannounced Labor Flourchecks

Labor floorchecks are generally unannounced for obvious reasons - the auditor is testing for compliance with timekeeping policies and procedures. The auditor is determining whether contractor employees are completing their timecards on a daily basis, using ink, charging the correct project number, etc. If these floorchecks were announced, employees would be sure that their timecards were 100 percent compliant.

Typically, auditors will not call in advance to let contractors know they are coming or to request a "convenient" time to meet. The auditor will arrive at the contractor location and request to meet with a point of contact and then together, the auditor and the point of contact will proceed with the labor floorchecks. In actual practice, the surprise element of a floorcheck doesn't last for more than two or three interviews before word spreads like wildfire that auditors are in the building. Auditors realize this and put more credence into early interview results than in later interviews.

Unannounced interviews are different than unaccompanied interviews. An auditor has no right to insist on unaccompanied interviews. An auditor cannot freely roam a Government contractor's premises unaccompanied (unless such rights have been specifically granted by the contractor). There is no contractual requirement, regulation, or statute that requires contractors to provide such access. We recently became aware of a situation where two auditors (not DCAA auditors inn this case) barged into a contractor's commercially leased facilities, breezed through the reception area, and began interrogating employees and taking photographs of work products. Employees did not recognize these "strangers" and were very reluctant to answer their questions. The contracting officer, who had requested the floorcheck, was unaware of the floorcheck methodologies that were being employed had had to offer very serious apologies to the contractor.

Contractors, know your rights. If you are uncomfortable with some form of "oversight", call your contracting officer.

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