DCAA RULES OF ENGAGEMENT: ARE THEY WORKING?

We are coming up on the two year anniversary of the Defense Contract Audit Agency (DCAA) "Rules of Engagement" memorandum designed to improve auditor/contractor and auditor/requester communications.  We can remember it took a lot of Freedom of Information Act (FOIA) litigation to obtain the release of DCAA's audit manual and it took some criticism from GAO to disgorge the memorandum of September 9, 2010 on better communications by and with auditors.  Have communications improved?  Not in our experience.  So maybe it's time for a few reminders.

The memorandum addresses communications with the contracting officer and the contractor during each phase of the audit.  Effective communication, it says, is an "essential part" of performing an audit. Moreover, auditors are told they must communicate with the contractor to gain a full understanding of the contractor's submission and continue to communicate throughout the audit to ensure that audit conclusions are based on a complete understanding of all the facts. Auditors should obtain the contractor's views of the audit conclusions for inclusion in the audit report.

There should be an entrance conference, communication with the contractor and the requester during the audit and an exit conference to discuss the findings, conclusions and recommendations for inclusion in the report.

Importantly, except in the case of forecasted costs, the auditor should provide the contractor a copy of the draft report or at a minimum the results of audit section of the report which includes opinions and recommendations.  This is to be done to "facilitate the discussion" of the audit results and to obtain the contractor's views on the audit results.  This sounds an awful lot like an award debriefing for which the purpose also is to enhance competition by providing guidance to contractors on how to better meet government requirements.

We saluted the National Aeronautics and Space Administration (NASA) on its debriefing guide.  Two years ago, we saluted DCAA on its "Rules of Engagement" but we wonder just how effective the "Rules" have been.

bill@spriggslawgroup.com          www.spriggslawgroup.com