By now, everyone knows that DCAA (Defense Contract Audit Agency) has "risked away" the preponderance of contractors' annual incurred cost submissions. By "risked away" we mean that the contractor submissions have been closed without audit and the proposed rates are accepted as final by the Government. By "preponderance" we are referring to quantity, not absolute dollar amounts. Major contractors will not be "risked-away" because there are too many dollars at stake.
So, have you ever wondered what kind of information DCAA retains in its files pertaining to these incurred cost submissions that are never audited? Well, wonder no more. Here's the list:
• Contractor’s annual incurred cost proposal,
• Adequacy checklist, The blank checklist is available on DCAA's public website.
• High/Low-risk determination,
• Coordination/communication with the contracting officer(s) - contracting officers sometimes advises the contract auditor of concerns that should be incorporated into audit steps,
• Communication with the contractor,
• Communication with prime contractor FAOs (Field Audit Offices), if applicable,
• Low-risk memo issued to the ACO,
• Final rate agreement letter,
• Cumulative costs worksheet, if applicable,
• ADV calculations, and
• All other related documents.
Contractors should request copies of the Adequacy Checklists and High/Low-Risk Determinations. If the local DCAA office declines to release them, they should be available under FOIA (Freedom of Information Act) procedures.
For contractors that have been places in the "High-Risk" pool, DCAA's characterization based on its High/Low-Risk Determinations worksheet is important and informative. Moreover, DCAA has been known to rely on outdated and/or inaccurate information when making the assessment. Such information should be corrected.
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