Strengthening DCAA Through Independence and Additional Resources

Today, The Washington Times and Federal Times provide a point-counterpoint as to how the government should proceed after recent Government Accountability Office and Department of Defense Inspector General reports questioned the quality of the Defense Contract Audit Agency’s (DCAA) audits.

The Washington Times focuses on the solutions considered at the Senate Homeland Security and Governmental Affairs hearing — looking at whether DCAA is tasked with too many audits, and whether they're sufficiently independent.

In the Federal Times, however, University of Baltimore Law School government contracting Professor Charles Tiefer and adjunct Professor Richard Loeb try to provide more context to the problems at DCAA. For one, they argue, many of the problems at DCAA are a result of acquisition reforms that occurred from the 1990s onward that "relaxed vital laws, regulations and practices in favor of contractors." But more importantly, they write, DCAA is much stronger than these reports suggest:

DCAA continues, in reputation and in fact, to be a tough and independent auditor that does quality oversight on the biggest and potentially the most errant of defense contractors, from KBR in Iraq to the builders of major weapons systems plagued by cost overruns.

As we've noted before, the defense contractor community has actually complained that DCAA is too aggressive in their auditing measures. But they could still use more help, Tiefer and Loeb conclude: "Rather than chastising DCAA, Congress can assist the agency by providing adequate resources, restoring common-sense contracting audit accountability and keeping DCAA strong so that it can vigorously present its side in discussions about contracting policy."

-- Mandy Smithberger

Comments

[Ex DCAA audtior in Iraq]

The Federal Times article gave too much credit to DCAA for questioning contract costs in Iraq and Afghanistan. Those questioned costs are easy money obtained by DCAA auditors matching the contractor invoices to supporting data such as purchase orders or vendor invoices and payments. That is not auditing. That is verification. DCAA auditors in Iraq and Afghanistan do not audit contractor costs for reasonableness and allowability in accordance with the federal acquisition regulation (FAR) and for compliance with contract terms.

[Auditor no more]

Would someone please let readers know that Charles Tiefer and Richard Loeb, authors of the referenced Federal Times article, are biased journalists? Tiefer sits on the Commission on Wartime Contracting that is chaired by a former DCAA Deputy Director, Mike Thiebault, who has been handling the current DCAA Director’s testimonies with kid gloves. Loeb is known to have a friendly relationship with some DCAA senior officials and has always made himself available for interview matters related to DCAA even though he has never worked for DCAA and has no clues of what the real DCAA culture is like

[DCAA Employee]

More resources are not the only answer, the entire agency needs to be rethought out. There is way too much make work (repetitive work at the same contractor)too many are fearful of making any decisions. Too many layers of management (5 regions and HQ) in the Internet age. Too many "Good Old Boys" who belong to the club. Many of the audits we do are very, very basic yet we do needless documentation on each and every job. Perhaps this is not GAGAS compliant but when a verification of a $25,000 progress payment takes 80 hours of auditor time and lots of management time to document risk on each of multiple similar audits, something is wrong with the process. Do we want to hire 7,000 more auditors to continue this insanity? We cannot treat a Fortune 500 company who is the largest defense contractor the same as a one man company working out of his house on an 200K grant. The leaders in DCAA management must address these issues and not be so concerned with saving their skin and looking good for the next open position. And finally, until someone in management takes a fall for the Thi Deim Li retaliation April Stephenson can't lead the agency.

[Dfens]

Excellent comment, Social Contractor.

I want to know how strengthening the DCAA is going to keep companies like Boeing from ripping me off for $1.5 billion for contracts that do not produce a single useful item like C-130 AMP. While DCAA concentrates on the nickle and dime stuff, there's real waste, fraud, and abuse going on. It's on a huge scale that neither POGO nor the DCAA has even begun to address.

Boeing bought a government official to get C-130 AMP, performed so badly on their contract that in the end the US Air Force decided to cancell it rather than have ANY airplanes modified, we get stuck with the $1.5 billion dollar price tag, and Boeing laughs all the way to the bank where they deposit their $150 million in profit.

Now tell me, Mandy Smithberger, how is the DCAA going to address my concerns over this? How are they going to get me my money back? This is $1.5 BILLION we're talking about. This is not a game. This is real money. This is my money. What is it that a hundred more DCAA auditors are going to do to get me my money back?

[SoCal Contractor]

The discussion about DCAA resources is valid but adding more auditors will not, by itself, address the fundamental and pervasive audit quality problems found by GAO and confirmed by the DOD IG. More is not different. You want different results, you need to do things differently, not just do the same thing with more resources.