Transcript NCMA Briefing

National Contract Management Association
May 10, 2012
Ronald C. Meldonian
Regional Director
Northeastern Region
Defense Contract Audit Agency
The views expressed in this presentation are DCAA's views and not necessarily the views of other DoD organizations
DCAA Organization
Internal Review
Gerry Reichel
Assistant Director,
Operations
Tom Peters
Executive Officer
Joe Garcia
Director
Patrick Fitzgerald
Deputy Director
Anita Bales
Assistant Director,
Policy & Plans
Vacant
General Counsel
Defense Legal
Service
Susan Chadick
Assistant Director,
Resources
Philip Anderson
Assistant Director,
Integrity &
Quality Assurance
Don McKenzie
Headquarters
Regions
Central
Region
Tim Carr
Vacant
Eastern
Region
Paul Phillips
Gary Spjut
Northeastern
Region
Ron Meldonian
William Adie
Mid-Atlantic
Region
Ken Saccoccia
Steve Hernandez
Western
Region
Donald Mullinax
David Johnson
Field
Detachment
Karen Cash
Terry Schneider
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Agency Goals/Priorities
 “One Agency” with a culture of teamwork,
excellence, accountability, mutual respect, integrity,
and trust
 Deliver high-quality audits and other financial
services
 Develop the skills of our motivated professionals
 Develop effective working relationships with DCAA
external stakeholders
 Ensure the workforce has the right space, the right
equipment and the right technology at the right time to
successfully deliver on the mission
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Deliver High Quality Services and Products
 Agency will use new Strategic Plan to work audit quality and
workforce issues
 Established proposal walk-through and early identification of
issues/inadequacies
 All Raytheon audits under cognizance of one region
 Issued extensive changes to audit guidance, procedures and
processes
 Authorized additional management/supervisory positions to
allow more time on audits
 Holding Agency-wide Field Audit Office (FAO) Managers
Conference annually
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Working Relationships with Stakeholders
Making a concerted effort to engage with stakeholders:
 Issued “Rules of Engagement”
 Initiated regular high level meetings with contracting
community
 Executives participated at speaking engagements with
DoD Procurement and Contractor Associations
 Issued Joint DCAA/DCMA Directors Memorandums
 Established MOU on EVMS
 Cost Recovery Initiative
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Working Relationships with Stakeholders
Requirements Workload and Resources
 Working with Stakeholders to defer or divest low risk workload will allow DCAA to focus on higher risk work with larger payback
to Warfighter/Taxpayer.
 Added 500 new employees over the last 2 years
 DPAP Memorandum (1/4/2011), “Better Buying Power: Guidance
for Obtaining Greater Efficiency and Productivity in Defense
Spending: ‘Align DCMA and DCAA Processes to Ensure Work is
Complementary”
 Increased Thresholds for Price Proposal Audits
 Forward Pricing Rate Agreements/Forward Pricing Rate
Recommendations
 Financial Capability Reviews
 Purchasing System Reviews
 Contractor Business Systems Rule
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Incurred Cost Initiative
Developed a risk-based approach to working down backlog in a
effective manner:
 Increase staffing
 Dedicated audit teams (FAO Manager, Supervisors, and
auditors)
 Developed revised incurred cost audit program
 Delivering an incurred cost auditing refresher training course
 Continue working with DoD on strategies to better align the
limited DCAA resources to the higher risk contracting areas
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Other DCAA Initiatives
 Emphasizing annual program plan meetings with
contracting officer and contractor to discuss priorities
 Implementing a project management approach to
include detailed milestone plans to facilitate timely
completion of audits
 Enhancing the role of the prime contract auditor in
coordinating major subcontract proposal audits under
major procurements.
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Contractor Business Systems
 The final Business System Rule was issued on February 24, 2012
 Defines contractor business systems as the contractor’s
 Accounting System
 Estimating System
 Material Management and Accounting System (MMAS)
 Purchasing System
 Property Management
 Earned Value Management System (EVMS)
 Currently pilot testing new programs at several contractor
locations (accounting system program will be published in the
near future).
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Contractor Business Systems
 DCAA will report on compliance with the
criteria in DFARS
 DCAA Reports will identify significant
deficiencies – defined by the interim Business
System Rule as
 Shortcomings in the system that materially
affects the ability of officials of the DoD to
rely upon information produced by the
system that is needed for management
purposes
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Contractor Support to Facilitate
a More Timely Audit Process
 Effective contractor proposal walk-throughs
 Adequate contractor submissions and assertions

Forward Pricing Rate Proposals
 Adequate Subcontract Proposals
 Adequate CAS cost impact proposals
 Adequate supporting data in a timely manner and
timely access to key contractor personnel
responsible for contractor support
 Real-time DCAA access to contractor systems
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Forward Pricing Proposal Adequacy
 Adequate Contractor Proposals – Facilitate Effective Audit
 Proposed amounts supported by detailed basis of estimate and
supporting documentation
 Supporting justification/explanation provided for significant
variances between prior buy actual cost data and proposed amounts
 Consolidated Bill of Material
 Detailed support for additive factors applied to various cost
elements
 Indirect Rates supported by contractor budgetary or trend data
 Adequate Support for Subcontractor Proposals
 Adequate prime contactor cost or price analysis
 Adequate subcontract proposal
 Support for commercial item price reasonableness
 Proposal reflects anticipated accounting changes
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WAY AHEAD
 Continue to build on professionally developing our
workforce
 Reducing learning curve with our new processes and
guidance
 Build on the changes to increase quality of services
and products
 Reduce Incurred Cost audit backlog to support
contract close-out
 Continue to broaden relationship and
communication with our stakeholders
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Defense Contract Audit Agency
Additional information on DCAA
and Points of Contact available at
www.dcaa.mil
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