Senate Committee Mulls Future of DCAA

Photo: Jack Moore

The Senate Homeland Security and Governmental Affairs Committee held hearings yesterday on the fate and the future of contracting oversight, taking testimony from diametrically opposed sides.

On one hand, watchdog groups advocated for a beefed up role for the Defense Contract Audit Agency (which, belying its name, also audits most civilian contracts as well) or even the creation of an entirely independent agency reporting directly to Congress and the White House.

On the other, the private sector and industry groups called for more communication and cooperation between federal audit authorities to deal with issues, rather than a tougher stance.

The terms of the debate couldn’t be clearer: should Congress consider a more robust, single agency to handle audits on contracts, which account for $530 billion in federal spending. Or, should it keep on with DCAA. And, if DCAA stays, will it be given a shorter or a longer leash?

DCAA’s mission has “expanded manifold,” since created in 1965, Washington, D.C., think tank the Center for American Progress reported. But, recently, the agency has been plagued by dwindling numbers of personnel.

And, while the numbers still say the agency delivers a return on investment for taxpayers by uncovering fraud and abuse, that number too is shrinking.

The Project on Government Oversight’s director of investigations Nick Schwellenbach, whose organization acts a nonprofit watchdog group, lobbied for a single, independent agency “outside the Pentagon’s chain of command,” in testimony before the Senate committee.

“Unlike most agencies, a new Federal Contract Audit Agency could save more money each year by uncovering waste and fraud than it would cost to run it,” according to a POGO news release. “The FCAA would provide a needed check on contractors, ensuring that the government is not overcharged for goods and services.”

Meanwhile, the Professional Services Council, a national industry trade association, said there must be greater trust between contract auditors and the companies they oversee. In fact, Stan Soloway, president and CEO of the PSC, said there has been too much focus on maintaining independence, to the effect that auditors are too isolated.

“As most would agree, the quality of an audit and, more importantly, the effectiveness of any response to an audit,” Soloway said in a release, “are tied to the degree of communication that occurs among the parties before and after the audit itself.”

Soloway said DCAA’s current practices  amount to a policy of “pass/fail,” which doesn’t make important distinctions between major and minor infractions, he continued. And,  even after companies have addressed issues, they can wait months and years, he said, to hear back from auditors.

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