Sen. Fred Thompson, R-Tenn., who introduced similar legislation in the 106th congressional session, has said the Defense Department overpays contractors by millions of dollars each year through errors, duplicate payments, and retroactive contract adjustments.
The new law mandates the use of recovery auditing by federal agencies that spend more than $500 million annually buying services and goods. The law requires OMB to issue guidance on how to run recovery auditing programs, to identify the types of contracts subject to recovery auditing, and to report to Congress on the progress of agencies that use recovery auditing programs. It also authorizes agencies to:
- Return recovered money to the account it was incorrectly debited from or to the general treasury.
- Pay auditors to run a recovery auditing program.
- Conduct management improvement programs to address overpayment problems.