We contracted with the Defense Contract Audit Agency (DCAA) to conduct an audit of incurred costs on four cost-plus-fixed-fee contracts issued to a PBGC contractor for information systems development services. The contracts were valued at $11 million, $9.2 million, $12.2 million, and $4.6 million, respectively.
The audit objective was to determine the allowability, allocability, and reasonableness of direct and indirect costs and to establish audit-determined indirect cost rates for contractor Fiscal Year ended March 31, 2006. DCAA questioned $28.8 million of indirect costs applicable to the contractor's entire universe of flexibly-priced prime contracts.
Of this amount, the estimated questioned indirect costs allocable to the four PBGC contracts total $97,581. Because the contractor did not concur to all of the questioned costs, we are awaiting action by the Defense Contract Management Agency (DCMA) Administrative Contracting Officer to resolve the non-concurred costs and establish final indirect cost rates.
We recommended to PBGC's Contracting Officer that closeout of the audited contracts be delayed until final indirect rates have been issued.
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