DCAA bookkeeping can be really complicated. Especially if you don’t have the help of someone with extensive experience in this realm of knowledge. Even companies with armies of well versed accountants can run into trouble. Just another reason why having someone who knows the ropes can be even more desirable.
One of the largest and most infamous cases in recent past that deals with DCAA is the dispute with Kellogg, Brown and Root Services. According to the KBR website, “KBR, Inc. is a global technology, engineering, procurement and construction company serving the hydrocarbons and government services industries.”
KBR has chosen to turn the tables on the US Government and more specifically, DCAA, by suing them over the findings from a 2007 audit that disallowed $103 million in costs on the Logistics Civil Augmentation Program III contract. KBR alleged that DCAA did not do their due diligence while investigating the cost reasonableness of its expenditures and was playing to the hands of the congressional committees that were doing investigations of the private security companies in Iraq. The overall findings of the DCAA during this audit resulted in $45 million in withholding under the KBR contract and a $103 million False Claims Act lawsuit brought by the U.S. Department of Justice. In 2012, the lawsuit was withdrawn and the Armed Services Board of Contract Appeals allowed KBR to recover the $45 million plus interest.
The $12.5 million lawsuit was filed in Delaware federal court in 2014 to recover $12.5 million in legal fees. The case was filed under the Federal Tort Claims Act and went as far as to accuse the DCAA of malpractice. However, according to law360.com, in May 2015, a Delaware federal judge found that the audit was within the “government’s discretionary authority” and could not be subjected to civil liability.
Although this case and all of the resulting litigation are the exception, rather than the rule, it is important to retain a company that can do your DCAA bookkeeping. This is one of the best ways to prevent and reduce the risk of any unfavorable findings that may result in unallowable costs, like in the case of KBR. Techeon has many years of experience in dealing with DCAA bookkeeping and accounting practices. We can help you with all of your businesses bookkeeping needs. Contact Techeon and equip your business to deal with the DCAA.