DCAA Gets Cut Off at the Pass – Again | PNWC’s Government Contracting Update

We’re beginning to think that Congress believes that the Defense Contract Audit Agency (DCAA) has become a stumbling block to efficient and effective Government contracting practices. Last week in discussing Sec. 820 of the 2017 NDAA (National Defense Authorization Act), we noted a provision that will effectively eliminate DCAA from auditing indirect costs in favor of privatization. DCAA can still audit the direct costs but will have no role in auditing indirect costs. We’re not sure how that will work out in practice however. One cannot develop indirect expense rates without auditing both direct and indirect costs. Someone, either the independent public accountant or DCAA is going to have to marry up the two sides to come up with final rates. And, most likely, the two organizations will be on different auditing cycles which may be the undoing of the entire concept.

Source: PNWC’s Government Contracting Update: DCAA Gets Cut Off at the Pass – Again