Question Related To a Proposed Labor Audit

[BCH1985]

Six years ago, in the infant stages of my companies existance, we subbed on work for one of the major defense companies on a service-based contract. Last week we received email from someone from DCAA as part of the Comphrehensive Labor Audit Team stating that we must submit the Labor Category Requirements and any analysis performed to verify adherence to the requirements stating that if we are unable to come up with this data that the labor ammounts billed may not be allowable and DCAA will question our billed labor amounts in their entirety.

Should these emails not be between this DCAA auditor and the prime as our contract was between us and the prime and not us and the Government? We were less than a 1M in revenue company at the time and our only dealings in this contract was to meet the target rates provided by the prime contractor and to submit candidates in which the prime contractor approved. I am having a difficult time understanding why these questions are coming to us rather than the prime contractor.

Any input/guidance would be greatly appreciated.

Thanks

[ji20874]

Have you already been paid in full by the prime contractor? Firm-fixed-price or cost-reimbursement (or something else)? Just wondering if you have any real liability...

[BCH1985]

Yes, we were paid in full 7 years ago under a FFP contract. We were ineligible and honestly still are ineligible for a CR type contract due to DCAA not coming to give approval to our accounting system yet.

[Guest Vern Edwards]

Seven years ago? Tell DCAA to get lost. You are outside the statute of limitations on government claims.

[BCH1985]

Vern -- Thank you for the quick response. For future reference, I have two other questions for you related to this matter if I may ask them.

1) Am I wrong in thinking that this should be a matter between the Government and Prime and not with us?

2) Is the statute of limitations the date from when the contract ends or when it was bid?

Thank you!

[Guest Vern Edwards]

1) I can't say. There may have been something in your contract that required you to provide the info. I don't really know what DCAA was looking for and why they wanted it from you instead of the prime. If your subcontract was FFP, then their request does not make much sense to me. If you know what they want and if you have it then go ahead and give it to them.

2) It is six years from the date any government claim would have accrued. Since you were a subcontractor, I cannot think of what claim the government would have against you.

[BCH1985]

Thank you Vern. I really appreciate your assistance and reading your blogs/responses to others.

I will post the conclusion to this in case it may help another contractor in a similar situation in the future.

[FAR Fetched]

...DCAA as part of the Comphrehensive Labor Audit Team stating that we must submit the Labor Category Requirements and any analysis performed to verify adherence to the requirements stating that if we are unable to come up with this data that the labor ammounts billed may not be allowable and DCAA will question our billed labor amounts in their entirety.

Dear DCAA person

My contract was with ABC Large Company. Please contact them.

Thanks

[Retreadfed]

BCH1995, I am curious as to what authority DCAA thinks it has to audit your subcontract. The government's (DCAA's) general audit authority is contained in FAR 52.215-2. Under that clause, DCAA only has the ability to audit FFP contracts and subcontracts to determine if defective pricing occurred. Even then, the right to conduct such audits expires three years after final payent on the contract or subcontract.