Counting down the Top 10 GovCon stories of 2010 (Number 10)

Logjam at the Defense Contract Audit Agency – Number 10

Summary
DCAA came into the spotlight in 2008 when the GAO revealed there were inappropriate relationships between DCAA employees and government contractors. According to the GAO, contractors had influenced reports and DCAA supervisors pressured subordinates. To help address the challenges at DCAA, Patrick Fitzgerald took charge eight months ago and has begun to reshape the DCAA. However, Patrick’s agenda has created a logjam to the point where a contractor pricing review now takes 72 days to complete (up from 28 in 2008). Auditors are now required to receive a sign-off from a field office manager, which is adding to delays and causing challenges with contractor price negotiations.

Why it matters to the GovCon space?

Written by: Rich Wilkinson, VP, Government Contracting, Deltek

Certainly proposals are important, but in the GovCon world, “cash is king.” GovCon firms run on cash flow and the logjam at DCAA has contributed to an industry-wide slowdown in payments to contractors. First it was more detailed review of invoices for those contractors who routed them through the agency. Then, it was widespread revocations of direct bill authority for even the smallest changes in contractors’ systems. These policy changes have created a truly impressive logjam that shows no promise of clearing anytime soon.

In Deltek’s 2nd annual CLARITY Industry Survey, even the largest GovCon firms report significant increases in the critical Days Sales Outstanding (DSO) metric.

In short, DCAA’s troubles seem to be stressing the industry from the beginning of the cycle to the end. And we’re all affected.

govWin will be updating the Top 10 Countdown each day until it hits number 1.

What do you think the top GovCon story was for 2010?