We’ve Come to the End of the Road: FY 2018 Report to Congress Says DCAA Backlog is No More

The Defense Contract Audit Agency (“DCAA”) recently made public its Fiscal Year (FY) 2018 Report to Congress (“Report”), which, among other things, provides an update on its incurred cost audits and highlights DCAA’s industry outreach activities.  Although the Report touts DCAA’s elimination of the incurred cost audit backlog, DCAA acknowledges that there still is a backlog of 152 years, the majority of which is due to reasons purportedly beyond DCAA’s control, and that is not yet in compliance with the NDAA 2018 requirements to complete incurred cost audits within 12 months of receiving a contractor’s adequate proposal.  To “eliminate” the backlog, DCAA “closed 8,482 incurred cost years with a total dollar value of $392.2 billion” using a variety of methods, including reports and memos – the latter of which account for more than half of the years closed.  Other reported methods for closing out audits included that the contractor went out of business or did not have any flexibly- priced contracts.