Most Government contractors with cost-type contractors are all too familiar with "floorchecks" - where the contract auditor comes in to your facility and interviews employees about their time charges and the tasks they are currently working. It is considered intrusive, disruptive, and often upsetting to the staff.
The traditional floorcheck is designed to test compliance with written policies and procedures. There is another type of "floorcheck" that the auditor (namely DCAA or Defense Contract Audit Agency) undertakes from time to time that is not necessarily designed to test compliance but is designed to evaluate effectiveness. Its called "work sampling". Work sampling is a commonly used industrial engineering technique designed to estimate how resources such as people, machines, facilities, or equipment are being utilized. For the contract auditor, the objective of work sampling is to assess the workforce utilization of a selected portion of an organization's operations. If an operation is to be audited, work sampling is a low cost alternative to continuous monitoring, just as sampling in the audit context is a low cost alternative to 100 percent evaluation of an account. The cost of continuous monitoring of an entire operation is generally prohibitive, and work sampling can yield a reasonably accurate estimate at a fraction of that costs
Work sampling studies are most often used used by auditors to evaluate a contractor's labor utilization. When performing a work sampling study, the auditor makes a specified number of observations of contractor personnel involved in the operation being audited. Each observation is classified according to type of activity, the activity types being specified prior to sampling. Using information gathered during the study, the auditor can estimate the percentage of time that the workers actually spend in each activity.
With minimal specialized training, an auditor can identify various worker actions and determine whether a contractor's management practices yield reasonable and acceptable levels of working activity. Work sampling may disclose underutilized workers, poor work practices, over-staffing, inadequate training, inefficient plan layout, excessive delays (caused by poor planning, material scheduling, or tooling), or other deficiencies.
In one case of work sampling, the auditor designed observations to validate whether widespread rumors of employees sleeping on the job, leaving early, taking long lunches, playing pool and table tennis, playing card games, etc were substantive. Based on their work sampling observations, the auditors estimated that employees were not working 27 percent of their paid hours. The contracting officer used this information to (i) get the contractor to improve its management practices and (ii) to reduce the amount of award fee paid to the contractor.