Auditor Strikes Back: Never an Idle Moment for Idle Facilities

February 14, 2017

As we reported in October, the Defense Contract Audit Agency (“DCAA”) Contract Audit Manual (“CAM”) was recently updated. One of the 13 areas of cost updated related to idle facilities. This topic is covered in Chapter 32 of the new Selected Areas of Cost Guidebook.

The guidance related to idle facilities is mostly unchanged with respect to Federal Acquisition Regulation 31.2015-17(a); however, a few points were called out in the DCAA guidance. Indicators of when facilities may be considered idle are:

  • The facility is completely unused.
  • No current need is foreseen or can be demonstrated for the completely unused facility.
  • The facility and/or equipment have been excluded from regularly scheduled maintenance and/or calibration schedules.
  • The facility has been sublet, rented or abandoned.

The old DCAA CAM did not specify these indicators for consideration in determining if a facility is idle.

If you believe you have facilities with any of these indicators, you may want to consider how DCAA would approach review by consulting the DCAA CAM and the Selected Areas of Cost Guidebook to better determine an approach for defending the allowability of potentially idle costs. Working with your Administrative Contracting Officer, if possible, is the best way to ensure any possible idle facilities, especially those that appear to have been idle for greater than a year, may be considered allowable into future periods.

Over the next few months, Cherry Bekaert’s Government Contractor Services Group will continue to provide information regarding the updated areas of cost within the CAM. If you have any questions, please do not hesitate to contact one of our experienced GovCon professionals for assistance.