• Test 1

Audits and System Reviews

The US government has more than 4,000 auditors ready and willing to ensure that the government is fully protected from errant contractors; this compares to the c70 employed within MOD CAAS. Contractors and subcontractors can expect to be audited and for these audits to be detailed. The cost of failure can be very high. The government rights to audit extend for a considerable time and they often use the time available to them.

System audits and reviews include:

  1. Contractors purchasing system reviews 44.3
  2. Subcontractors 52.244
  • Government Property Accounting Review 252.245-7001
  1. Government property 52.245
  2. Special tooling 52.245-17
  3. Special test equipment 52.245-18
  4. Management of government property reports and records 45.505
  5. Management of government property identification 45.506
  • Labour and overhead rates
  1. Predetermined indirect cost rates 52.216-15
  2. Progress payments based on costs 32.5
  3. Performance based payments 32.10
  4. Progress payments 52.232-16
  5. Performance based payments 52.232-32
  6. Penalties for unallowable costs 52.242-3
  7. Certification of final indirect costs 52.242-4
  8. Indirect cost rates 42.7
  9. Disallowance of costs 42.8
  10. Air and ocean transportation by US flag carriers 47.4 and 47.5
  1. Claiming facilities cost of capital 52.215-16

Agencies carrying out the audit are either DCAA (MoD CAAS for UK under intergovernment MOU) or DCMA

  • Contract audit services (DCAA) 42.1
  • Contract administration services (DCMA) 42.2