A Pennsylvania-based defense contractor faced $16.4 million in questioned costs and automatic adverse audit opinion after missing critical response deadlines during their fiscal year 2024 incurred cost audit. The contractor’s failure to provide requested documentation within the initial 30-day response period established by DCAA audit notification procedures resulted in systematic presumptive cost disallowance affecting overhead…
A Florida-based systems integrator faced $43.8 million in defective pricing adjustments after DCAA auditors discovered the contractor failed to disclose current cost or pricing data during negotiations for contracts exceeding the $2 million Truth-in-Negotiations Act threshold. The audit revealed systematic failures spanning 52 contracts over four years where the contractor possessed vendor quotations, internal cost…
A Massachusetts-based defense contractor faced $22.7 million in questioned costs after DCAA auditors discovered systematic failures to maintain adequate vendor qualification and selection documentation during their fiscal year 2024 incurred cost audit. The contractor’s reliance on informal vendor relationships without documented technical capability assessments, financial responsibility verification, or past performance evaluation violated Federal Acquisition Regulation…
A Virginia-based aerospace contractor faced $18.6 million in questioned costs after DCAA auditors discovered systematic failures to document make-or-buy decisions for subcontracted work exceeding the $2 million threshold during their fiscal year 2024 proposal audit. The contractor’s practice of subcontracting manufacturing operations historically performed in-house without documented economic analysis, capacity utilization assessment, or government notification…
If your company holds government contracts, you’ve likely encountered the alphabet soup of compliance requirements: DCAA, FAR, DFARS. Among these, one question consistently keeps government contractors awake at night: “Is my Excel timesheet DCAA compliant?” The short answer? Not likely. While Excel can technically record time, meeting the Defense Contract Audit Agency’s stringent requirements is…
A Texas-based aerospace manufacturer lost $6.8 million in allowable facilities capital cost of money during their fiscal year 2024 contract negotiations after DCAA auditors rejected their net book value calculations for systematic violations of Cost Accounting Standard 414. The contractor’s failure to properly exclude fully depreciated assets, adjust for accumulated depreciation timing, and segregate land…
A mid-Atlantic defense contractor faced $19.8 million in questioned costs after DCAA auditors discovered systematic violations of executive compensation limitations during their 2024 incurred cost audit. The contractor’s failure to properly calculate and segregate executive compensation exceeding the statutory $671,000 ceiling for fiscal year 2025 resulted in automatic unallowable cost penalties, contract modification requirements across…
A California-based engineering contractor faced $11.4 million in questioned costs after DCAA auditors rejected their health insurance allocation methodology during their fiscal year 2024 incurred cost audit. The contractor’s practice of allocating health insurance premiums using headcount rather than labor hours violated Cost Accounting Standard 405 requirements for allocating costs based on causal or beneficial…
A major systems integrator discovered the devastating compounding effect of unallowable cost penalties when DCAA auditors imposed $14.3 million in additional charges beyond the initial $8.7 million in disallowed costs during their fiscal year 2024 audit. The contractor’s inclusion of unallowable entertainment expenses, excessive compensation costs, and lobbying expenditures in their cost pools triggered the…
A Fortune 500 defense contractor faced $38.4 million in disallowed indirect costs after DCAA auditors rejected their overhead rate proposal for inadequate supporting documentation during fiscal year 2024 negotiations. The contractor’s failure to provide acceptable cost pool segregation evidence, proper allocation base justification, and compliant organizational realignment documentation resulted in a 47% reduction in proposed…
