As a Government Contractor it is extremely important to remain compliant with rules and regulations. This blog provides a quick snapshot of DCAA and what compliance should look like for your organization.
Introduction to DCAA
What DCAA Does
- The Defense Contract Audit Agency (DCAA) provides audit and financial advisory services to the Department of Defense (DOD) and other federal entities responsible for acquisition and contract administration.
- DCAA provides recommendations to government officials on contractor cost assertions regarding specific products and services.
- DCAA auditors examine contractor accounts, records, and business systems to evaluate whether contractor business practices and procedures are in compliance with the Federal Acquisition Regulation (FAR), the Defense Federal Acquisition Regulation Supplement (DFARS), Cost Accounting Standards (CAS), and other applicable government laws and regulations.
- DCAA has the authority to establish final indirect rates.
What DCAA Does Not Do
- DCAA audits only contractors; it has no internal audit responsibilities in DoD.
- DCAA has no direct role in determining which companies are awarded defense contracts.
- DCAA does not negotiate or settle costs directly with contractors.
DCAA has about 230 offices located throughout the United States, Europe, and the Middle East.
- Headquarters
- Regional Offices/Field Detachment
- Corporate Audit Directorates (CAD)
- Branch Offices
- Resident Offices
In FY 2020, DCAA had a staff of approximately 3,843 auditors.
What is Compliance?
- Being compliant means being compliant with ALL contract requirements and applicable regulations (FAR, DFARS, CAS, etc.).
- DCAA doesn’t certify or issue a formal statement that an organization is DCAA compliant.
- DCAA doesn’t approve specific software tools as compliant.
Government Contract Rules & Regulations
- FAR – Federal Acquisition Regulations
- CAS – Cost Accounting Standards
- Federal Agency Supplements
- Example: DFARS – Defense Federal Acquisition Regulations Supplement
- The Truthful Cost or Pricing Data Statute (formerly known as TINA – The Truth in Negotiations Act)
Pro Tip: The regulations in effect on the date of contract award generally will govern the contract regardless of its period of performance and despite the fact that a regulation might change during the course of the contract.
For more information on DCAA Compliance
Access our On Demand DCAA Compliance for Small to Mid-sized Contractor Webinar or
Contact us today for more information on how PCI can assist your organization.
