DCAA Still Pushing for Expanded Subpoena Authority

Every year, DCAA (Defense Contract Audit Agency) prepares a report to Congress on its activities. The fiscal year 2014 report was issued on March 25, 2013 but just recently became publicly available. (Click here to download a copy). The feature we turn to first is Section 4, Significant Deficiencies and Recommended Actions to Improve the Audit Process. This is where DCAA lays out its views of deficiencies within the acquisition process and recommends changes to the ongoing challenges.

One of the challenges DCAA faces is the lack of express authority to review "data other than certified cost or pricing data". This lack of authority, according to DCAA, hampers its ability to obtain sufficient contractor data to conduct timely, quality audits, especially audits of commercial item procurement. To resolve this problem, DCAA wants authority to review and subpoena "data other than certified cost or pricing data". In its own words:

The DCAA subpoena authority contained in 10 U.S.C. 2313 permits DCAA both access to and the authority to subpoena "certified cost or pricing data" but it does not specifically provide similar authority for "data other than certified cost or pricing data" as defined in FAR 2.101. When a contracting officer determines that historical data is insufficient to determine the reasonableness of prices in a fixed-price contract for commercial items, FAR 15.403-3 permits the government to obtain "data other than certified cost or pricing data" to assist in making a fair and reasonable price determination. Contractors have been reluctant to provide this information to DoD, including DCAA. While the FAR allows contracting officers to request data, there is currently no authority to compel production of that data. This problem is likely to get worse. Even as the Department's Better Buying Power Initiative and Industry groups continue to promote the use of commercial procurements, there has been no improvement in the Department's ability to obtain adequate supporting data from contractors to support the proposed commercial prices. 

DCAA plans to submit a legislative proposal for the next NDAA (National Defense Authorization Act). The Agency believes that with this authority, it will be able to provide contracting officers timelier audit support and better-supported negotiation positions for commercial procurements, which will, in turn, improve their effectiveness and reduce the risk of paying excessive commercial prices.

 It may well be that the Department of Defense is not in favor of granting expanded subpoena authority to DCAA. In fiscal year 2014, it took DCAA an average of 95 days to turn out a forward pricing proposal audit report. If DoD can avoid procurements based "certified cost or pricing data", it can award contracts significantly quicker. They've got a pretty good process going with commercial item procurement - why would they want DCAA to come in and muddle up the situation?