Renewed Focus on Contractor Business System Reviews
The Defense Contract Audit Agency and the Defense Contract Management Agency have taken certain steps to improve the contractor business system review process and are forecasting that reviews will increase significantly over the next four years. The author of this article discusses the reviews and recommends that contractors prepare for a new wave of audit activity.
According to a recent U.S. Government Accountability Office (“GAO”) report, the Defense Contract Audit Agency (“DCAA”) and the Defense Contract Management Agency (“DCMA”) have taken certain steps to improve the contractor business system (“CBS”) review process and are forecasting that CBS reviews will increase significantly over the next four years. Contractor business systems include a contractor’s accounting, earned value management, estimating, purchasing, material management, and property management systems. These systems require contractors to maintain internal controls that, as GAO noted, “act as the first line of defense against fraud, waste and abuse of federal funding.” Given their importance, the renewed focus on ensuring CBS reviews are conducted in a timely and consistent manner is not surprising, and contractors should prepare for a new wave of audit activity.
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“Renewed Focus on Contractor Business System Reviews,” by Sara N. Gerber was published in Pratt’s Government Contracting Law Report (Vol. 5, No. 6), an A.S. Pratt Publication, LexisNexis. Reprinted with permission.
This article was first published in Blank Rome’s Government Contracts Navigator blog on March 21, 2019.