Acquisition Workshop TrainingNCMA Los Angeles/South Bay Chapter

DCAA’s Role in Contract CloseoutOctober 27, 2015

C. Steven HernandezDeputy Regional Director

DCAA Western Region

Page | 1The views expressed in this presentation are DCAA’s views and not necessarily the views of other DoD organizations.

Topics About DCAA

Contract Closeout Stakeholders – Integrated Approach

DCAA’s Role in Contract Closeout

FAR 42.708 Quick Closeout

Contract Closeout Barriers

Actions to Overcome BarriersPage | 2

About DCAADCAA Mission Statement

The DCAA, while serving the public interest as its primary customer, shall perform all necessary contract audits for the Department of Defense and provide accounting and financial advisory services regarding contracts and subcontracts to all DoD components responsible for procurement and contract administration. These services shall be provided in connection with negotiation, administration, and settlement of contracts and subcontracts to ensure taxpayer dollars are spent on fair and reasonable contract prices. DCAA shall provide contract audit services to other Federal agencies, as appropriate.

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DirectorAnita Bales

Deputy DirectorKen Saccoccia

EasternRegion

David JohnsonMark Richards

NortheasternRegion *

vacantMartha McKune

Mid-AtlanticRegion **

vacantChris Andrezze

WesternRegion

Donald MullinaxSteve Hernandez

General CounselDefense Legal Service

Susan Chadick

Assistant Director,Human Capital &

Resource ManagementMaureen Higgins

Assistant Director,Operations

Tom Peters

Inspector GeneralAngela Janysek-

Denzler

Field Detachment Karen Cash

Ken Anderson

Assistant Director, Integrity &

Quality AssuranceGary Spjut

Chief of StaffGeorge Lembrick

Chief of StaffGeorge Lembrick

Assistant Director,Policy & Plans

Don McKenzie

DCAA Organization

HeadquartersRegions

CentralRegion

Diana GraffDebbra Caw

DCAA 1965-2015: Celebrating 50 Years of Excellence

*Raytheon CAC ** Northrop Grumman CAC

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Contract Closeout StakeholdersIntegrated Approach

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DCAA’s Role in Contract Closeout

Audit Annual Incurred Cost/Rate Submissions

Support Pre-Negotiation and Negotiation of Annual Costs and Rates

Evaluate Cost-Reimbursable Final Vouchers

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DCAA’s Role in Contract Closeout (Cont.)Negotiated and Quick Closeout Rates

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ContractIncurred Cost/Rate Submission Fiscal Year

2008 2009 2010 2011 2012

A

B

C

D

E

DCAA’s Role in Contract Closeout (Cont.) Incurred Cost Initiative

Eliminating the Incurred Cost Backlog was an Initiative under DoD’s Better Buying Power 2.0

Developed a Multi-Pronged Approach to Working Down Backlog in an Effective Manner

Dedicated audit teamsMulti-year audit techniquesIncreased staffing dedicated to incurred costImplemented a low-risk sampling approach to performing incurred cost audits

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DCAA’s Role in Contract Closeout (Cont.)Completed Incurred Cost Years By Fiscal Year

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FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 -

2,000

4,000

6,000

8,000

10,000

12,000

654 487

4,088

8,636

11,101

9,464

FAR 42.708 Quick Closeout Provides for Quick Closeout of Contracts prior to

Agreement on Final Indirect Cost Rates Powerful Tool to Close the Last FY of a Multi-Year Contract Quick Closeout Criteria:

Contract is physically completeAmount of “unsettled” direct and indirect costs on any one contract or delivery order is less than $1M or 10%, whichever is lessRisk assessment is performedAgreement can be reached on a reasonable estimate of allocable dollars

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FAR 42.708 Quick CloseoutNegotiated and Quick Closeout Rates

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ContractIncurred Cost/Rate Submission Fiscal Year

2008 2009 2010 2011 2012

A

B

C

D

E

Contract Closeout Barriers

Delinquent Contractor Incurred Cost Submissions Delayed Settlement of Contractor Final Overhead Rates

Delay and even denial in providing supporting records Disallowed/questioned costs pending resolution (Form 1)Delay in the prime settlement of subcontract costsDelay in submitting final vouchers

Discrepancies between the Accounting and Paying Offices (Reconciliations and Special Provisions)

Awaiting Removal of Excess Funds Litigations/Investigations Pending

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Actions to Overcome BarriersReducing Late Submissions

Send Contractor a 30-Day Late Letter

Support the Contracting Officer in Establishing Unilateral Rates

Based on audited or other data that excludes unallowable costsSet low enough so unallowable costs are not reimbursed

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Actions to Overcome Barriers (Cont.)DCAA Tools for Contractors

All are Found at the DCAA Public Website (http://www.dcaa.mil) Audit Process Overview - Information for Contractors Manual

(Guidance)Assists with understanding applicable requirements and help ease the audit processDescribes what contractors should expect when doing business with the U.S. Government and interacting with DCAA auditors

ICE (Incurred Cost Electronically) Model (Checklist and Tools)Standard electronic version of the "Model Incurred Cost Proposal" Assists in preparing adequate incurred cost proposals

Incurred Cost Submission Adequacy Checklist (Checklist and Tools)

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Defense Contract Audit Agency

Additional Information on DCAA is found at www.dcaa.mil

DCAA Points of Contact are available atwww.dcaa.mil under “Locator”

Supporting the Warfighter Protecting the Taxpayer

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Backup Slide

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DCAA’s Role in Contract Closeout (Cont.)Wide Area Workflow (WAWF)

DFARS 252.232-7003 states WAWF is the Only Acceptable System Used to Submit Vouchers Except when

The contract requires hard copy submissionThe process is determined unduly burdensome to the contractor

Sampling Methodology used by DCAA to Select Interim Vouchers in WAWF for Review and Approval

DCAA Submits Approved Interim Vouchers through WAWF to DFAS (Non-Selected Vouchers are Sent Directly to DFAS)

Final Vouchers are Sent Through WAWF to the Contracting Officer who May Request a DCAA Evaluation

Contracting Officer Approved Final Vouchers are Submitted Through WAWF to DFAS for Payment

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