Hill Bringing In DCAA To Respond to Contractor Complaints

By Nick Schwellenbach

Early next week, Patrick Fitzgerald, the director of the Defense Contract Audit Agency (DCAA) will brief House Armed Services Committee staffers on “Contractor Complaints of DCAA.” The Defense Department confirmed the briefing is scheduled on March 22nd.

We asked DCAA and the committee what the complaints are about.  “This question would be better addressed by the Committee as we do not have any direct knowledge on the complaints,” a Defense Department spokeswoman, speaking on DCAA’s behalf, told POGO.  “It is our understanding that based on discussions with the Committee, there have been complaints from companies regarding the timeliness of DCAA audits.”

POGO called and emailed Josh Holly, the spokesman for the House Armed Services Committee, but have not heard back.  We hear the committee staffers to be briefed are: Cathy Garman, Vickie Plunkett, Spencer Johnson, and Jenness Simler.

Nick Schwellenbach is POGO's Director of Investigations.

Comments

[Dan]

POGO, where's the follow-up on this story? It is damaging to POGO's credibility not to hold DCAA to the same standards it seeks from the rest of Government. DCAA is currently a drain on taxpayers. DCAA is currently providing no service that is assisting the buying activities or the contract administrators. Contractors are justifiably outraged by DCAA's failure to issue reports in a timely manner. Both side of the procurement community are understandably disappointed with the total absence of audit reports that are so needed to ensure fair and reasonable prices. POGO, based on historical contributions, has long been an advocate for DCAA, now POGO appears to be a lap dog for this broken down and mostly useless agency. POGO help push DCAA back into a productive organization or join in the calls for its elimination..

[disgruntled senior 12]

I know an auditor who works in a branch office. 3 years ago the office was caught up with all incurred costs, and proposals went out on a 29 day average. No complaints from auditors, supers, customers, but maybe a few contractors. Three years later this office is pushing 3 yrs late on the incurred, proposals take 6 months, senior auditors are discouraged and waiting for retirement date or jump ship. The newbies are like newborn puppies trying to run across a clean kitchen floor: Full of eagerness, but can't control where they are going and end up in trouble.

[Pete]

This is about time. The SES crew at DCAA needs to removed entirely because of their incompetence. They are not saving the Government any money with their efforts and have put DoD needed program at added risk. I hope the committee asks Pat about how many man years were cancelled in audit assignments during the past two years and how many open assignments are currently open with greater than 500 hours incurred (1/3 man years). Than in the same breath ask how many new auditors are required? Sounds like missmanagement to me....

[Mike]

SS - good theory, but not the reality of DCAA today. Sam and Ed are correct. DCAA has significant leadership issues. But no matter how you look at it, at the end of the day, DCAA is about providing audit advice to contracting officers. We are in a state of paralysis. Management is afraid of being gigged and being the subject of the next GAO or IG review. As a result, we have become risk adverse and unable to function in a timely manner. In the end, we are not providing contracting officers timely advice. At times, they move out without us, at other times, they have to wait and either contracts are delayed in being closed or contract award is delayed. Neither is effective. Fitzgerald has been in place almost 17 months and DCAA has become much worse under his leadership. He is no longer the new "fresh eyes." He has been in place long enough to fix the issue. Fitzgerald seems proud that DCAA issues fewer audits and is taking longer to complete the audits. Good theory, but the reality is that it is too long and too few audits to be effective for our contracting officers. DCAA has reached new lows and Fitzgerald only has to read the POGO blogs and GovExec blogs to see how unhappy DCAA employees really are. We need action and instead all we get are videos and more guidance from Policy (and it conflicts with the guidance issued the day before and the day before that).

[SS]

Of course audits are untimely...DCAA is doing alot more regarding audit field work. It's a good thing. It's called GAGAS, and DCAA audits were lacking in that department. It has nothing to do with the Director or the direction the agency is taking. DCAA is headed on the right path. The problem is with more audit field work there is also a need for more hours and more auditors. With Congress tighting DCAA belts, how is DCAA supposed to cover this increased work load? DCAA needs more auditors. Period. Congress should give them the funds DCAA need to make it happen.

[Sam]

The major problem is DCAA's lack of direction. Since they appear afraid to make mistakes of commit errors in judgement they are doing nothing. When they do perform proposal audits it is "one-size-fits-all" with ill trained auditors who do not know what is relevant. Contractors who want to be compliant find it hard to function in this dynamic, do little environment.

[Ed]

Why would contractors complain about DCAA, we only issue about 1-2 reports per auditor per year under Director Fitzgerald compared to about 10 audits per auditor per year under the prior directors. There is a reason we monitored cycle-time for issuing audit reports in the past, to ensure that we actually issued audit reports. Now we issue reports that are so late, they are not useful. Last year, my office cancelled more assignments than we issued. We wasted thousands of hours on cancelled assignments. So why again are contractors complaining? By the way, check the financial statements of the largest contractors. They have more profit and cash reserves than ever.

[Mike]

Note to contractors - be careful what you ask for. You wanted the prior Director replaced and you got your wish. But now you have a Director that does not understand DCAA's mission. On the surface, some contractors may like this and even take advantage of Fitzgerald. But Fitzgerald does not understand the need for DCAA to be timely in both proposal audits as well as the annual incurred cost audits. Now you have a DCAA that cannot get out of its own way and issue a report if their lives depended on it. Not surprised that contractors are complaining about DCAA not being timely, everyone else is, including our customers. Curious how Fitzgerald will respond to the staffers. He will probably support increasing the audit threshold for desk review incurred cost and reduce the oversight of contractors even more. In the end, contractors still win because DCAA oversight of contractors has been scaled back so dramatically that we are no longer effective.