Defense contract auditors caught in crossfire

No one likes auditors. For years, companies have complained about intrusive GSA audits. When I was at CIT, state auditors would show up and sit in our conference room for weeks going over every piece of paper. It’s the nature of the activity that seems to create tension and distrust.

But the Defense Contract Audit Agency has risen to a new level of infamy. After two withering GAO reports on its performance, the director was reassigned to a different job in the Defense Department comptroller’s office. The Senate Homeland Security and Governmental Affairs Committee held a hearing and blasted the organization’s ability to ferret out waste, fraud and abuse.

Meanwhile, industry is complaining about the exact opposite. We have heard horror stories from companies about audits that go back years and measure seemingly insignificant details instead of performance and results. We have read the stories of no-bid contracts that lead to massive overcharges.

We know DCAA is understaffed and overworked. But the solution to this mismatch is not to focus on the details of the process but rather on the final product. If the agency is pleased with the result, that should be at least some indication of success.

Distrust of contractors is a particularly disturbing byproduct of those investigations. Everyone seems to forget that many of the employees at the contracting companies were once feds. They don’t leave the government and suddenly become crooks. Most contractors still believe in and work for the mission of the agency.

Audits will remain an important protection for the taxpayer, but it’s hard to see this environment improving when industry is screaming and passing the costs of these audits on to the customer, Congress is complaining that not enough crooks have been found, and DCAA remains understaffed.