Some DCMA Customers Can't Get No Satisfaction

POGO has obtained a For Official Use Only Biennial Review of the Defense Contract Management Agency's (DCMA) Acquisition Management. The review, based on a survey of DCMA customers, concludes that while every customer agrees that acquisition management is important, customers are not fully satisfied with DCMA's coordination and overall quality (effectiveness, efficiency, and value) for this mission.

As the Executive Summary notes, there was a marked decline in customers' satisfaction with quality at the DCMA, going from the 93 percent positive response in 2001-2 to 64 percent in 2007-8. When it came to effectiveness and efficiency, customers gave the highest marks to acquisition management services and products meeting requirements: 71 percent of customers said they were satisfied. Granted, only 48 percent of the customers were even aware of performance standards for acquisition management--and of those, 25 percent did not think that the performance standards had been met--but it at least appears to customers that DCMA is meeting the requirements of acquisition management. One commenter told DCMA they'd come a long way, baby.

But if this is the case, it may be that DCMA's customers' expectations are too low. Numerous Wartime Contracting Commission hearings have called into question DCMA's ability to coordinate with the Defense Contract Audit Agency (DCAA) to perform one of the most important functions of acquisition management: holding contractors accountable for their actions. Appendix C of the survey echoes these findings. "DCAA can perform all financial capability audits and DCMA should not be performing this effort. DCAA has access to all contractor data and not the limited data used by DCMA...[For example,] DCMA determined the financial condition was adequate for contract award, DCAA determined [the contractor] did not have a business plan or cash flow forecast and could not provide an opinion. This is a big red flag...DCMA swept the issue under the carpet and ignored DCAA's opinion."

Other dissatisfied customers said that DCMA provided clean opinions so contracts could be awarded on time, showed a complete disregard for cost control program management like the earned value management system (EVMS), lacked independence ("I have sat in a number of meetings on complex cost issues were the CO [Contracting Officer] states--this will not make Lockheed or Boeing (or any other contractor) happy. Are we sure we want to take this approach?"), and was "very sloppy" when it came to verifying contractor data accuracy. DCMA was also accused of lacking processes to conduct development flight tests. One commenter summed it up, saying that DCMA had "become a less meaningful part of the check and balance mechanisms we have with our industrial base."

One of the frequent criticisms of the investigations that have been conducted into both the DCAA and the DCMA is that the voices being heard are leadership, not the people on the ground. Unfortunately, this survey doesn't provide significantly more insights from this perspective either--52 percent of the customers that responded to the survey serve in a "Command" position, defined as "one or more organizations under my control use products or services from this business line." It seems like the survey would have been more useful if it had targeted more program managers, oversight customers, and direct customers. But the suggestions that emerge from the comments are pertinent nonetheless, calling for DCMA to make better use of DCAA audit findings, keep communication lines open, make good use of the management tools they already have in place, and increase training and the workforce to implement accountability.

-- Mandy Smithberger

Comments

[Stephen W. Allen]

The statement in App. C that DCMA can’t do financial capability analysis and determine financial condition and that this job should be delegated entirely to DCAA, indicates to me that there are still too many people in acquisition management who are unfamiliar or totally ignorant of the DCMA Financial Analysis Center's function and with our products. The FAC performs nearly all preaward financial capability analyses requested by DoD procurement commands, as well as many postaward financial reviews. Our analysts are among the most highly trained professionals within DCMA, attested to by the combined experience, length of service, knowledge and expertise of the 10 analysts doing this work. Every financial analyst has a background in cost/price analysis and/or auditing with at least 20+ years of experience. Within DCMA, the Financial Analysis Center has been performing financial reviews for nearly 4 years, including thousands of financial capability/condition evaluations for preaward surveys and most major DoD contractors. A significant share of the preaward financial evaluations result in NO AWARD recommendations and are based on the financial analysis and assessment of all available financial information relative to determining whether a prospective contractor is financially capable of assuming and successfully completing a U.S. Gov't. contract of the type and magnitude being considered. These determinations are not lightly made and are based on sound judgment and analysis of all the facts and data available at the time. Every report is submitted for careful supervisory screening and review prior to release. The FAC prides itself on its professionalism, timeliness and product quality. The FAC is committed to delivering an on-time quality report in response to the customer's requirements and will tailor the report to the exact specifications and needs of the customer to ensure those needs are met. The DCMA Financial Analysis Center's customers can expect and will receive complete satisfaction.

[Don Phillips]

The comment about the financial capability analysis by DCMA misstates the facts and exhibits a lack of understanding of the process. The contractor was very sound financially and the only problem with the contract/award was "product substitution" by the contractor. Any reasonable analyst that took the time to review the facts would concur with this opinion. The DCMA Financial Analysis team does an excellent job in supporting the needs of DoD buying commands in determining which contractors are financially responsible. Their reports and advice are timely, acccurate, and technically sound.