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  • Question

    1. If the $700,000 threshold is for obtaining the Certified Cost or Pricing data, does that mean this is the threshold for requesting a DCAA audit ? 2. Is there official or unofficial dollar threshold for requesting a DCAA audits? 3. Should the agency request and obtain certified cost or pricing data prior to requesting a DCAA audit ? 4.What are some of other recommended actions that agency Contracting Office do prior to requesting an audit from DCAA in order to minimize the DCAA time 5. Is there guidance other than DFARS and PGI ? 6. Sample letter requesting audit available? Google takes you to the DFARS and PGI (too confusing).


    Answer

    1.  While $700,000 is the threshold for obtaining Certified Cost or Pricing Data under the statute (10 USC 2306a for DoD, 41 USC 3501 for others), it is not the threshold for requesting an audit. This statutory threshold is for contractor’s to supply cost or pricing data for pricing actions principally at contract formation, but also, in certain circumstances, in making the final contract cost and/or price determination.
    2.  For DoD, per PGI 215.404-2(c), the current official threshold for requesting DCAA audits is $10M for fixed-price proposal and $100M for cost type proposals.
    3.  If the statue applies, before requesting an audit, data suitable for certification at the conclusion of negotiations should be requested in accordance with FAR Table 15-2 format which appears immediately following FAR 15.408(n). The DCAA will apply an expanded proposal checklist (FAR 252.215-7009) which incorporates the requirements of FAR Table 15-2.
    4.  Procedurally, the contracting office request should first be made of the cognizant Contract Administration Office, such as DCMA, who will then request assistance, if necessary, from the DCAA. An integral part of the contract closeout process is the determination of the final rates. This is an exclusive responsibility of the administrative contracting office, not the contracting officer making award of the contract. Note that of all the responsibilities that may be negotiated or delegated in a memorandum of understanding (over 70 functions enumerated at FAR 42.302(a))  – the contracting officer cannot retain this authority to determine final rates as noted at FAR 42.302(a)(9).
    5.  For non-DoD agencies, their respective agency supplements to FAR would apply. DFAR, and its associated PGI, is the agency supplement to FAR for DoD.
    6.  The request for audit need only make reference to the contract and the contractor’s closeout proposal. It was/is not necessary that the cost proposal had to have been audited at the time of contract award. If certified cost or pricing data were required, the requirement was/is that a cost analysis be performed. But that need not have been done by the auditors. Note the higher threshold for audit on cost type contracts. It is not unusual that the audit might occur only at contract closeout, and not also at contract award. It is imperative, however, that the contractor have an acceptable accounting system in place at the time of contract award, see FAR 16.301-3(a)(3). This is necessary to accomplish the audit at contract closeout in accordance with the Allowable Cost and Payments clause of the contract (FAR 52.216-7).

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