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. The DCAA operates under the direction, authority, and control of the Under Secretary of Defense/Chief Financial Officer. The DCAA began providing audit and financial advisory services to Government contracting officials on July 1, 1965.
The Defense Contract Audit Agency (DCAA), while serving the public interest as its primary customer, shall perform all necessary contract audits for the Department of Defense (DOD) and provide accounting and financial services regarding contracts and subcontracts to all DOD components responsible for procurement and contract administration. The DCAA will provide contract audit services to other Federal agencies as appropriate. These services will be provided in connection with administration, negotiation, and settlement of contracts and subcontracts to ensure taxpayer dollars are spent on fair and practical contract prices.
The DCAA also provides contract audit services to other Government Agencies, as well as to other countries under the Foreign Military Sales (FMS) program, on a reimbursable basis. The largest non-DOD agency for which DCAA performs audits is NASA, primarily since the same government contractors do significant business with both DOD and NASA.
• DCMA will be responsible for issuing Forward Pricing Rate Agreements and Forward Pricing Rate Recommendations when they are the acquainted contract administration office. The goal of this is to eliminate redundant work and ensure a single department rate position is provided to DCAA/DCMA customers at all times.
• Requests for field price audits on cost type proposals less than $100 million and fixed type proposals under $10 million will be sent to DCMA. DCAA will be responsible for audits of proposals above these limits. DCAA will execute assist audits on proposals of any dollar value if they are auditing the prime contractor.
• The DCAA plans to stop performing regularly scheduled Purchasing System Audits. The DCMA will continue to perform Contract Purchasing System Reviews.
• The DCAA plans to stop performing Financial Capability Reviews and Audits. DCMA will continue to conduct Financial Capability Reviews during their Pre-Award Survey Process.
The Defense Contract Management Agency (DCMA) is a specific factor of the Defense Department tasked with working directly with contractors. Their main responsibility is to ensure the Government gets the best value for their dollar, the highest quality, and on-time delivery. These tasks not only take place before a contract award but also take place during the contract performance period.
In reality, the DCMA is concerned with the financial system in that it is capable of producing a quality product on time and within budget.
Both of these agencies stem from the Department of Defense (DOD) and are primarily concerned with helping the Department of Defense control their contracting business.
For more information concerning the DCAA and the DCMA, contact the attorneys of Malyszek & Malyszek today for a free consultation.