Contract Pricing: DCAA's Audit Coverage Lowered by Lack of Subcontract Information
NSIAD-92-173
Published: May 29, 1992. Publicly Released: Jun 04, 1992.
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Highlights
Pursuant to a congressional request, GAO reviewed the extent to which the Defense Contract Audit Agency (DCAA) is aware of subcontracts subject to defective pricing audits.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should examine the cost and benefits of changing the Defense Federal Acquisition Regulation Supplement to require prime contractors to notify the government of all subcontracts subject to the Truth in Negotiations Act. | DCAA introduced a proposal to modify the acquisition regulations to require DOD contractors to notify the government of all subcontracts subject to audit for defective pricing. The Defense Acquisition Regulation Council agreed and submitted its proposal for amending the regulations to the Deputy Under Secretary of Defense (Acquisition Reform). In July 1994, the Deputy Under Secretary concluded that the imposition of new reporting requirements was contrary to the basic tenet of the acquisition reform effort to streamline the acquisition process and did not concur in the implementation of the reporting requirement. This nonconcurrence precluded the DAR Council from further processing the... rule for approval and, in August 1994, the case was closed without further action.
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| Department of Defense | The Secretary of Defense should direct DCAA to require that when offices auditing prime contracts identify subcontract information, they share that information with the DCAA office responsible for auditing the subcontract. |
DCAA directed field offices to identify subcontracts at the prime contractors audited, and share that information with responsible field offices.
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Topics
Data integrityDefective pricingDefense auditsDefense procurementDepartment of Defense contractorsPrime contractsSubcontractsSubcontractorsInventoriesPrime contractors