Report | June 29, 2015

Evaluation of Defense Contract Management Agency Contracting Officer Actions on Reported DoD Contractor Estimating System Deficiencies

DODIG-2015-139

Objective 

The objective of the evaluation was to determine whether Defense Contract Management Agency (DCMA) contracting officers took timely and effective actions on DoD contractor estimating System deficiencies reported by Defense Contract Audit Agency.

Finding

DCMA did not take timely or appropriate actions on reported contractor estimating system significant deficiencies. For 17 of 18 reported deficiencies we randomly selected, DCMA contracting officers did not comply with the Defense Federal Acquisition Regulation Supplement (DFARS) requirements for resolving estimating system deficiencies. The contracting officers did not:

  • timely issue initial and final determinations on the reported significant deficiencies;
  • obtain or adequately evaluate the contractor responses; and
  • withhold payments from the contractor’s billings to protect the Government interests.

This likely delayed the correction of significant estimating system deficiencies and lengthened the time the Government was unable to rely on contractor estimates for future Government work.

Recommendations

We recommend that the Director, Defense Contract Management Agency:

  1. review all 18 cases and take appropriate actions to address estimating system deficiencies and implement payment withholds on any disapproved estimating systems;
  2. improve internal controls and conduct training to provide reasonable assurance that contracting officers issue timely determinations and implement payment withholds in accordance with the DFARS.

Management Comments 

The Director, Defense Contract Management Agency concurred with the reported recommendations. DCMA developed a tracking tool as an internal control measure to help ensure timely actions on reported business system deficiencies. The comments and planned corrective actions were responsive and no additional comments are required.