DCAA Audit Update

The Defense Contract Agency (DCAA) issued a guidance memorandum on December 19, 2013 effective for new and in-process assignments clarifying the documentation requirements for professional and consultant services (http://www.dcaa.mil/mmr/13-PAC-026.pdf). The relevant cost principle is FAR 31.205-33.

The consultant cost and professional services cost principle spells out the three types of evidence needed to support the contractor’s claim for these expenses.

(1) Details of all agreements (e.g., work requirements, rate of compensation, and nature and amount of other expenses, if any) with the individuals or organizations providing the services and details of actual services performed;

(2) Invoices or billings submitted by consultants, including sufficient detail as to the time expended and nature of the actual services provided; and

(3) Consultants’ work products and related documents, such as trip reports indicating persons visited and subjects discussed, minutes of meetings, and collateral memoranda and reports.

The DCAA guidance restated these points is the following manner:

·         An agreement that explains what the consultant will be doing for the contractor;

·         A copy of the bill for the actual services rendered, including sufficient evidence as to the time expended and nature of the services provided to determine what was done in exchange for the payment requested, and that the terms of the agreement were met. This documentation does not need to be included on the actual invoice and can be supported by other evidence provided by the contractor;

·         Explanation of what the consultant accomplished for the fees paid – this could be information on the invoice, a drawing, a power point presentation, or some other evidence of the service provided

 

The guidance further explains to auditors that they are to look for evidence to satisfy these three areas; not a specific set of documents.