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Procurement Insight

Jeffery A. White, C.P.M
President and CEO

May 15, 2019 

Contractor Business Systems

J.A. White & Associates, Inc. will present a four-part series on Contractor Business Systems. For additional information on how we can assist your company with business system challenges, contact us at
Summary of GAO findings Regarding
Contractor Business Systems
DATE:    February 2019
FROM:   United States Government Accountability Office (GAO)
TO:       Congressional Committees - GAO-19-212
RE:      A Report-DOD Needs Better Information to Monitor and Assess Review Process
>> Why GAO Did This Study
Contractor business systems produce critical data that contracting officers use to help negotiate and manage defense contracts. These systems and their related internal controls act as important safeguards against fraud, waste, and abuse of federal funding. Federal and defense acquisition regulations and DOD policies require that DOD take steps to review the adequacy of certain business systems, but GAO and other oversight entities have raised questions about the sufficiency and consistency of DOD’s review process.
>> What GAO Recommends
GAO recommends that DCMA, in collaboration with DCAA, develop a mechanism to monitor and ensure contractor business system reviews are conducted in a timely fashion. DOD concurred with the recommendation. 
>> What GAO Found
Since 2011, the Department of Defense (DOD) has implemented several changes to its processes for reviewing contractor business systems to include systems such as accounting, estimating, and purchasing.

  • DCAA plans to significantly increase the number of business system audits over the next 4 years.
  • Clarify roles and responsibilities of the two agencies conducting reviews, which are, Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA).
  • Clarify timeframes for business system reviews.
  • Established criteria for business systems.
  • Institute a mechanism that will monitor the timeframe of withheld payments from contractors that were found to have significant deficiencies in their business systems.


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