News | July 1, 2022

A Short History of DCAA

By DCAA Staff Writer

DCAA was founded on July 1, 1965 when it assumed responsibility for contract auditing for all of DoD. In announcing the decision to create a consolidated audit function, Secretary of Defense McNamara stated, “We have created a new department wide agency, the Defense Contract Audit Agency, to increase efficiency and lower the cost of Government auditing of defense contracts.”

Initially, DCAA was established as a headquarters element with seven subordinate organizations or regions named for major cities. The regional construct has remained but the names of the regions have changed numerous times switching from cities to geographical regions. The last major reorganization was in 2016 when the Agency realigned to what it is today with three geographical Regions, four Corporate Audit Directorates, and a Field Detachment for classified work.  

black and white photo of 7 individuals in business suits holding an award
DCAA Received Hammer Award July 15, 1996 from Vice President Al Gore. The award recognizes government teams that make significant contributions to enable the government to work better and cost less.
black and white photo of 7 individuals in business suits holding an award
DCAA Receives the Hammer Award
DCAA Received Hammer Award July 15, 1996 from Vice President Al Gore. The award recognizes government teams that make significant contributions to enable the government to work better and cost less.
Photo By: DCAA Staff
VIRIN: 220629-D-DV043-1001

The first employees were tasked with developing uniform audit guidance from the existing Service audit guidance. This project resulted in the first Contract Audit Manual (CAM), a voluminous document contained in two 3-ring binders, which was updated with pen and ink changes (yes, someone would cross out the old and write in the new). In the first 10 years of the CAM, a total of 77 revisions were made. Finally, in 1979 the CAM was reprinted but it wasn’t until 1988 that it was printed in a paperback version. In 2013, the CAM was moved to an online version on the DCAA public website where it can be found today.

Much has changed over the years but the one constant has been the mission of the Agency. From the very beginning the mission, as laid out in the original document establishing the Agency, the focus is on “furnishing government procurement and contract administration officials with vital data to use in the negotiation, administration, and settlement of defense contracts. The successful fulfillment of its contract audit responsibilities helps greatly to assure that Government procurement dollars are being prudently spent.” We might write that differently today, but we still focus on saving the taxpayers’ dollars.