DCAA Not Wanting the Truth?

There's a potential major defense scandal brewing. As reported by Government Executive's Robert Brodsky, the GAO released a report yesterday claiming that it "found a too-cozy relationship between management at the Defense Contract Audit Agency and some of the contractors they are assigned to audit. GAO also said auditors who complied with the investigation were subject to harassment and intimidation from their supervisors."

DCAA totally rejects the GAO report, saying in the Washington Post that there was "no evidence to support GAO's conclusions that 'DCAA managers took actions against their staff that hindered their investigations.' "

I don't know how accurate the GAO report is, but in reading it there is an awful lot of thick smoke being produced for there to be no fire, and the GAO only got involved because of numerous complaints to its fraud hotline.

If the GAO report turns out to be true, expect it to rapidly erode whatever little faith is left in defense acquisition by Congress and the public. Defense officials may claim that the acquisition process is not broken, just bent, but this could expose it as being shattered. If DCAA audits don't represent a program's "financial ground truth," it undermines the accuracy of a whole lot of reports to Congress. That would not make it very happy.

At the very least, expect calls from Congress for detailed, additional audits of defense contractors, as well as calls for the mandatory rotation of DCAA supervisors similar to what is being called for (but resisted) at the FAA when its inspectors were found to be too cozy with the airlines. As you may recall, FAA management also denied that there was a problem, until investigations of whistle blower complaints exposed the truth.

Congressional hearing will no doubt soon be scheduled to see whether there really is fire responsible for all that smoke.