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DCAA 2018 Hot Button Highlights

By: Curt Smith , Manager Each year Cherry Bekaert addresses topics that effect the Defense Contract Audit Agency (“DCAA”) in our DCAA “Hot Buttons” webinar. A summary of the January 17, 2018, webinar is presented here. The webinar is replay is also available on our YouTube channel. The webinar is available for replay on our YouTube channel. Section 803 of the 2018 National Defense Authorization Act (“NDAA”) Section 803 of the 2018 NDAA contains several provisions reforming defense contract auditing. Perhaps the provision with the greatest impact on DCAA directs the Department of Defense (“DoD”) to begin using private auditors to perform incurred cost audits to reduce the current backlog. The provision intends to focus DCAA resources on forward-pricing audits, which are considered. Read More.

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2018 NDAA: Changes to TINA Threshold and Incurred Cost Audits

In November, the conference committee for the National Defense Authorization Act (“NDAA”) for fiscal year 2018 completed one of the final steps in the NDAA process filing its report reconciling the differences between the House version and the Senate version of the legislation. Shortly after the reports were reconciled, the conference report was officially enacted into law as the fiscal year 2018 NDAA. This bill authorizes fiscal year 2018 appropriations and sets forth policies for Department of Defense (“DOD”) programs and activities. One of the major changes in the fiscal year 2018 NDAA, Section 811, is the increase in the. Read More.

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DoD Proposes Changes to Cost or Pricing Data Rules for Small Businesses

On August 30, the Department of Defense (“DoD”) issued a proposed rule to implement a section of the National Defense Authorization Act for fiscal year 2016 that provides exceptions from the certified cost and pricing data requirements, and from the records examination requirement for certain awards to small businesses or nontraditional defense contractors. The proposed rule would amend the Defense Federal Acquisition Regulation Supplement (“DFARS”) to provide an exception from cost or pricing data for contracts, subcontracts, or modifications of contracts or subcontracts valued at less than $7.5 million. This exception would be applicable to small businesses or “nontraditional” defense contractors,. Read More.

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Subcontractor Oversight (Who’s Responsible?)

By: John N. Ford, JD ; Senior Consultant  Who has privity? 42.505 – Post-award Subcontractor Conferences (a) The prime contractor is generally responsible for conducting post-award conferences with subcontractors. However, the prime contractor may invite Government representatives to a conference with subcontractors, or the Government may request that the prime contractor initiate a conference with subcontractors. The prime contractor should ensure that representatives from involved contract administration offices are invited. (b) Government representatives– (1) Must recognize the lack of privity of contract between the Government and subcontractors; (2) Shall not take action that is inconsistent with or alters subcontracts; and (3) Shall ensure that. Read More.

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New Guidance–Limited Role for DCAA Audit of Non-DoD Contracts

The 2016 National Defense Authorization Act (NDAA, S.1356) (“the Act”) includes a number of sections related to Acquisition Policy or Acquisition Management. In particular, the Act discusses the subject of the Defense Contract Audit Agency (“DCAA”) contract audits and the requirements for improved auditing on the incurred cost backlog (“Indirect Cost Rate Proposals”; “ICPs”) are explicitly mentioned. Section 893 prohibits DCAA from performing any audits for non-defense agencies (e.g., National Aeronautics and Space Administration (“NASA”)), unless the Department of Defense (“DoD”) certifies that DCAA is current on the ICP backlog or less. This restriction could cause some disruption for contractors. Read More.

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Prohibition of Reimbursement of Congressional Investigation Costs

On February 17, 2016, the Federal Register published a proposed rule that would prohibit government contractors from claiming costs incurred in response to a congressional investigation or inquiry that is the subject matter of a proceeding resulting in a disposition as described in 10 U.S.C. 2324(k)(2). As a refresher for those who are lucky enough to not deal with legal expense on a recurring basis, 10 U.S.C. 2324(K)(2) – Allowable Costs Under Defense Contracts, states that a disposition includes any of the following that results from a violation or failure to comply with, a Federal or State statute or regulation: A conviction. Read More.

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