Fort Belvoir, Va. –
The DCAA Northrop Grumman Field Audit Office (FAO) recently supported U.S. Navy contracting officers with two high-value Requests for Equitable Adjustment (REAs) audits related to a multimillion-dollar military weapons program. During an REA audit, DCAA auditors check the contractor’s request for more money or time on a project and determins if the request is reasonable based on the audit findings. The FAO met with the Naval Air Systems Command (NAVAIR) to review the REA submissions for certain delivered parts of a weapons program. The U.S. Navy sought DCAA’s advisory services for what types of audits or additional work could be performed to meet their needs. Because labor and labor burden were the customer’s top concerns, the FAO tailored an approach to include recalculated labor costs based on timecard hours to help strengthen the Navy’s position during negotiations.
While there were delays, mostly due to contractor challenges, the FAO proactively communicated with the customer weeks in advance and offered draft results by the original due date, much to the customer’s appreciation. As best practices for the FAO, the team focused on offering options to meet the customer’s goals and avoided saying “no.” Because of the audit complexity and sensitivity, two teams worked to perform one REA each. Senior auditors led the higher complexity audit and the two teams worked together to ensure consistent methodologies and reporting formats. The FAO ensured the customer was included throughout the entire process, from the contract walkthrough to key discussions, so there were no surprises to the contractor.
Thanks to DCAA’s early engagement, creative problem-solving, and transparent communication, the contracting officer was prepared for negotiations and able to save millions in the contract.