Prepare for a Decrease in DCAA Audits Thanks to New DoD Standards

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The Department of Defense (DoD) announced on October 18, 2010 that as a part of their efforts to appropriately align DCAA audit resources, the DoD was increasing the limit imposed for contracting officers’ to request DCAA audit assistance to Fixed-Price proposals exceeding $10 million and Cost-Type  proposals exceeding $100 million. Auditors will complete all in-process price proposal audits that are below the revised thresholds. The revisions of the Procedures, Guidance and Information (PGI) does not impact the requirement for cost or pricing data as that threshold remains at $700,000 as of October 1, 2010. 

According to WashingtonTechnology.com, approximately $92 billion in annual DOD contracts will be affected by the new thresholds, Project on Government Oversight (POGO) estimated, calling it a radical reduction in contract oversight by DCAA. “POGO has long feared contractors and their government allies would block DCAA from exposing contractor ripoffs,” Nick Schwellenbach, POGO’s director of investigations, said today.“Why are billions of dollars being put at risk when [Defense] Secretary [Robert] Gates is demanding cost savings?”

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