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overclock

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  1. It is DCAA's opinion that the prime is responsible for auditing the subcontractors. See FAR 52.216-7(d)(5), "The prime contractor is responsible for settling subcontractor amounts and rates included in the completion invoice or voucher and providing status of subcontractor audits to the contracting officer upon request." But you're probably not going to allow the prime to audit your books and the prime is highly unlikely to have the auditing staff to audit your FPRP. DCAA is reluctant to audit your rates because the government does not have any privity of contract with you. So what's a subcontractor to do? The prime contractor would have to send its CACO/DACO/whatever a request to have your indirect rates audited. The CACO/DACO would then forward that request to your CACO/DACO who would then send it to your cognizant DCAA office. (Don't you just love the chain of command?) Is your overall accounting system, which includes the accounting and billing subsystems approved? I'd imagine so with a CPFF subcontract vehicle. What about the prime's overall accounting system (and subsystems)? Part of DCAA billing system audit program is to verify that the correct indirect rates are used and that primes monitor the adequacy of the subcontractor's accounting and billing systems. Did your company have any adjustments to the rates after the end of last year? Did you process any retroactive rate adjustments for the end of year rates? A CPFF subcontract type comes with lots of headaches for the prime. I'm surprised that they issued a cost-type subcontract in the first place.
  2. I stand corrected. Thank you h2h.
  3. The DoD IG published a revised instruction on Audit Policies last month. http://www.dtic.mil/whs/directives/corres/pdf/760002p.pdf The instruction says "DCAA provides contract audit functions for all DoD Components." Although the instruction goes on to state: So if DCAA can't get the job done then the DoD component can get someone else to do the audit. It would be best to see if you can get the DoD component to hire the external auditors to maintain the appearance of independence. If you hire the external auditors be sure to have them state in their audit report they are independent and the audit was done in accordance with GAGAS. Essentially have the auditors GAGAS up their audit report like DCAA does, although the DoD IG stated that DCAA doesn't follow GAGAS. (But that's a different post for a different day.) Disclaimer: The views expressed in this post are mine and do not represent the views of my employer. They probably don't represent the views of DCAA either.
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