Top 10 GovCon Stories – #10

by michaelhackmer / Tuesday, December 07, 2010 / Published in Michael Hackmer, Top Ten GovCon Stories

Logjam at the Defense Contract Audit Agency

Summary
DCAA came into the spotlight in 2008 when the GAO revealed there were inappropriate relationships between DCAA employees and government contractors. According to the GAO, contractors had influenced reports and DCAA supervisors pressured subordinates. To help address the challenges at DCAA, Patrick Fitzgerald took charge eight months ago and has begun to reshape the DCAA. However, Patrick’s agenda has created a logjam to the point where a contractor pricing review now takes 72 days to complete (up from 28 in 2008). Auditors are now required to receive a sign-off from a field office manager, which is adding to delays and causing challenges with contractor price negotiations.

Why it matters to the GovCon space?

Written by: Rich Wilkinson, VP, Government Contracting, Deltek

Certainly proposals are important, but in the GovCon world, “cash is king.” GovCon firms run on cash flow and the logjam at DCAA has contributed to an industry-wide slowdown in payments to contractors. First, it was more detailed review of invoices for those contractors who routed them through the agency. Then, it was widespread revocations of direct bill authority for even the smallest changes in contractors’ systems. These policy changes have created a truly impressive logjam that shows no promise of clearing anytime soon.

In Deltek’s 2nd annual CLARITY Industry Survey, even the largest GovCon firms report significant increases in the critical Days Sales Outstanding (DSO) metric.

In short, DCAA’s troubles seem to be stressing the industry from the beginning of the cycle to the end. And we’re all affected.

Check back on Wednesday, December 8th for the #9 most important story.

In the meantime, we are interested in what you think was the top story of 2010. Please take a moment to fill out our poll below. If you do not see a story you think was important, use the option marked “other” to submit your own idea. The results will be collected over the next several days and shared on Monday, December 20th, with the #1 story of 2010.

Questions? E-mail us: CommunityLeader@govwin.com