Resolution of Defense Contract Audit Agency Findings of Questioned Contractor Costs Need Significant Improvement

The Chief Procurement Officer should update the Audit Assistance policy for procurement personnel to include procedures for monitoring the SOL on contract incurred cost proposal submissions so that cost recoupment actions can be completed prior to expiration.

The Chief Procurement Officer should ensure that findings of questioned costs identified in audits of contractor incurred costs are addressed in conformance with requirements of Treasury Directive 40-03 and the Office of Management and Budget (OMB) Circular No. A-50, which establishes 11 standards that must be met to assure the prompt and proper resolution of audit findings and implementation of audit recommendations.

The Chief Procurement Officer should ensure that the COs do not provide dispositions of contract audit findings until they render a final decision as to the treatment of the audit recommendation(s), complete the CO determination process, and the contractor has implemented the audit recommendation(s) or otherwise complied with the CO decision.

The Chief Procurement Officer should ensure that all contract files comply with Federal Acquisition Regulation (FAR) requirements and that necessary documents are placed in the contract file as they are received or developed (to include negotiation memoranda), and develop a process to properly pack, label, catalog, and ship containers for all contract files archived to National Record Centers.

The Chief Procurement Officer should ensure that the COs retain records of payments recovered in the settlement of questioned costs in their contract files to support closure of planned corrective actions in the JAMES based on actual (not planned) cost recoupment from contractors.