Industry to Pentagon: Fix relationship between oversight agencies

Reforming roles of Defense audit and contract management agencies is one of many recommendations.

Pentagon officials evaluating ways to streamline operations and reduce overhead need to reform the way the Defense Contract Audit Agency and the Defense Contract Management Agency work together, industry officials recommended Wednesday.

The agencies often provide contradictory guidance, which creates confusion, delays action and drives up costs as conflicts are sorted out, said Ric Sylvester, vice president for acquisition policy at the Aerospace Industries Association, which represents hundreds of military contractors.

Fixing the relationship between DCAA and DCMA and creating a single point of authority on major contracts would help reduce overhead costs, Sylvester said.

The recommendation is one of many steps AIA believes the Pentagon could take to reduce overhead costs immediately. The association submitted a white paper to Pentagon acquisition officials describing their top 10 proposals, culled from nearly 100 recommendations submitted to the Pentagon in July.

The department is engaged in a wide-ranging effort to streamline operations, and has sought input from both industry officials and employees.

The relationship between DCAA and DCMA has been fraught with problems. Earlier this month, Christopher Shays, co-chair of the Commission on Wartime Contracting, called it "dysfunctional" during an oversight hearing highly critical of the agencies. Last week, the Defense Department Inspector General released a report critical of the contract management agency's role in providing the audit agency with critical information regarding a contractor's performance.

Sylvester said conflicts between the agencies are especially apparent when contractors try to set forward pricing rate agreements -- estimates of overhead that can be applied to contracts. "One of the things we're running into is DCAA has to audit forward pricing rate agreements and DCMA plays a role in establishing those, but at times, they're contradictory. DCAA will do something and DCMA will do something else. If they worked together to establish those in a timely fashion that would save us a lot of problems," he said.

The group also recommended the Pentagon reduce the volume of cost and pricing data for all proposals.

"Contracting officers assume a reasonable price can only be based on the submission of voluminous cost data, even for commercial items where data may not be available in the form demanded and for items with several lots of production history," according to the white paper. For example, the paper noted that contractors had to submit 94,000 pages of cost data for the F-22 aircraft multi-year procurement.

Sylvester said the Pentagon's acquisition workforce must have the training and expertise to conduct price analyses and exercise informed judgment when making decisions.

"Once you have bought some of these things and you understand where the costs are, you should be able to do price analysis to be able to figure out if the cost is fair and reasonable," Sylvester said.

An underlying problem is that contracting officers are not encouraged to exercise judgment, he said. "You have a very difficult environment in terms of people second-guessing you. No contracting officer wants to be hauled in front of Congress and be berated because they made a judgment on something that an auditor came along and said was a bad judgment," Sylvester said.

"It's easier to fall back on process and on reams of data and say, 'Look, I followed the process exactly and my judgment is based on 94,000 pages of data, than it is to say, 'I looked at the cost curves and this is what I think is fair and reasonable,' " Sylvester said.

Ashton B. Carter, undersecretary of Defense for acquisition, technology and logistics, is heading the Pentagon's effort to streamline the acquisition process. He is slated to announce the department's plans in September.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.