Tuesday, September 16, 2014

DoD Inspector General Rips Missile Defense For Disregarding DCAA Audit

In what could be construed a sad commentary on how contracting officers value the input of DCAA (Defense Contract Audit Agency) when negotiating contracts, the DoD-IG (Inspector General) released an audit report last week criticizing the Missile Defense Agency (MDA) for awarding a $1 billion contract without an audit.

The IG undertook the audit as a result of a hotline call, probably from someone within DCAA who took umbrage with MDA's actions. It wasn't as if MDA had failed to request an audit - they dutifully requested DCAA to audit the contractors proposal. But they didn't wait for the audit before concluding negotiations. As a result of failing to wait for DCAA input, the IG estimated that MDA could have negotiated a significantly lower contract price and saved "millions of dollars in reduced contract fees".

During the course of the audit, DCAA had requested additional time to issue its final report because it wanted to include the results of an assist audit of a major subcontractor. MDA granted a one month extension even though it knew the revised audit due date was beyond its deadline for negotiating the contract. MDA didn't bother to inform DCAA as to the negotiation deadline. Neither did MDA notify DCAA that the scope of the contract had been cut in half due to budget constraints. So DCAA was going merrily on its way auditing a proposal that was already obsolete and ultimately useless because it was timed to be issued after contract negotiation.

It was pretty obvious that MDA didn't care about an audit nor did they value DCAA enough to even inform the Agency of the negotiation deadline or that the proposed scope of work had been cut in half. What did they intend to do with the audit results - paper their files? It would seem that MDA has not bought in to DCAA's vision statement: "Dedicated professionals working together to deliver top-quality audit services to support the Department and the warfighter, and to protect the taxpayer's interest."

What were the recommendations and corrective actions as a result of the IG review? More training! (Training solves every ill, no?) The IG was happy with that corrective action.

You can read the full IG report here.

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