PNWC's Government Contracting Update

DCAA Involvement in Contract Close-out Process | PNWC’s Government Contracting Update

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DCAA (Defense Contract Audit Agency) has made outstanding progress in reducing its incurred cost backlog – so much so that the prohibition against the Agency performing audits for non-DoD agencies until it caught up on its incurred cost backlog, was lifted last October. Most of this backlog reduction was a result of DCAA’s new-found risk-based approach to auditing. Under a risk-based approach, DCAA uses certain criteria to categorize contractors into high risk or low risk. Those classified as low risk are dumped into a nation-wide pool and only one percent get selected for audit. The remaining 99 percent are closed without audit. Clearing out the incurred cost backlog therefore was fairly easy because there were far fewer audits to perform.

Source: PNWC’s Government Contracting Update: DCAA Involvement in Contract Close-out Process

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