DAY 1 – Monday, April 11, 2011
9:00 Opening Remarks from the Conference Co-Chairs
Mike Steen, CPA
Senior Managing Consultant
Government Contracts Group, Beason & Nalley
Former DCAA Regional Director
(Huntsville, AL)
9:15 Contractor Oversight: What Recent and Pending Policy Changes Mean for Your Cost & Pricing Strategy
Jonathan L. Kang
Deputy Assistant General Counsel
US Government Accountability Office (GAO)
(Washington, DC)
Robert A. Burton
Partner, Venable LLP
Former Deputy Administrator of the Office of Federal Procurement Policy (OFPP)
(Washington, DC)
10:15 Networking Coffee Break
10:30 Defining “Cost or Pricing Data”: How to Comply with Recent FAR Changes and Ensure Data is Current, Complete and Accurate
Brian Leathers
Chief Financial Officer
Austal USA, LLC (Mobile, AL)
Stephen D. Knight
Partner, Smith Pachter McWhorter PLC
(Washington, DC)
- How recent re-write and clarification of rules under the FAR impact your responses to RFPs and data requests
- Distinguishing “cost or pricing data” from “other than cost or pricing data”
- What is expected for “current, complete and accurate” data
- When cost or pricing data is not required
- What DCAA expects when requesting data “other than cost or pricing data”
- When the failure to disclose pricing factors can result in defective pricing
- How DCAA is applying TINA to contractors and subcontractors: What triggers a defective pricing audit, and how much cost or pricing data is required during a defective pricing audit
- What is a “fact” that must be disclosed vs. a “judgment” under TINA
11:30 Keynote Address: DCMA Speaks on Recent Agency Developments, Audit Priorities and DCAA-DCMA Relationship
Ronald J. Youngs
Acting Executive Director, Contracts
Defense Contract Management Agency
(Washington, DC)
12:15 Networking Luncheon for Speakers and Attendees
1:30 Supporting Subcontractor Cost Estimates and Pricing: Avoiding Lost Profits due to Inadequate Price Competition, Market Research, Data and Mischarging
Chris Pockney
Principal, Government Contract Services
Ernst & Young (Washington, DC)
- Ensuring adequate price competition: Impact of DoD cost and productivity initiatives, and what to do if a price competition does not yield enough bidders
- What is expected for conducting market research
- To what extent DCAA will reject a prime contractor’s analysis of subcontractor cost estimates
- What to do when a subcontractor denies access to books and records: Managing DCAA requests for additional subcontractor data
- When to use third party consultants to evaluate subcontractor cost or pricing data, and when DCAA will reject third party findings
- Working with your supply chain to ensure ongoing compliance, responsive proposals and minimized defective pricing risks
2:45 Networking Refreshment Break
3:00 Preventing Payment Withholdings for Internal Control System Defects and Inadequacies: Managing DCAA Systems Reviews amid New Defense Business Systems Rules
David J. Roll, CPA
Vice President-Industry Compliance
ManTech International Corporation
Former Chief Technical Audit Services DivisionDefense Contract Audit Agency (Fairfax, VA)
Mike Steen, CPA
Senior Managing Consultant, Government Contracts
Group, Beason & Nalley Inc.
Former DCAA Regional Director (Huntsville, AL)
- Status and impact of Defense Business Systems Rules under DFARS
- How DCAA and DCMA identify and quantify system defects in accounting, purchasing, estimating and property, earned value and material management
- Supporting your forecasts for estimating systems reviews and how much detail to include
- When and to what extent forecasts are deemed unsupported
- What triggers automatic withholding of payments on cost reimbursement, incentive-type, time-and materials, and labor-hour pacts providing progress payments based on costs or on a percentage or stage of completion
- What constitutes an “adequate” control system: Update and trends in audit outcomes
- Developing and implementing a corrective action plan
- Securing auditor approval of corrections to business systems
4:15 Year in Review of Disallowed Costs: Recent Challenges to Compensation, I R & D and Legal Fees, and Lessons Learned for Determining Allowability
William J. Colwell
Counsel, Litigation & Cost Policy
The Boeing Company (Arlington,VA)
Nicole J. Owren-Wiest
Partner, Wiley Rein LLP
(Washington, DC)
Learn what types of costs have been the most susceptible to government scrutiny and challenge over the past year. Don’t miss crucial updates that will impact your approach to assessing allowability and safeguarding your profits.
Topics will include:
- Identifying the types of costs most susceptible to challenge and DCAA success levels over the past year
- Determining the allowability of cash and non-cash compensation, including:
- executive compensation
- sign-on bonuses
- discretionary plans and long-term incentive plans (LTI Plans), cash and non-cash
- How DCAA conducts executive compensation reviews, and determines reasonableness and allowability
- Determining the allowability of legal settlement and fees, and other professional services
- Scope of allowability of employee health insurance benefits, and reducing the risk of double damages for miscalculations
- What qualifies as “IR & D” and when these costs can be (even in part) passed onto government
- Termination costs: Constructing an effective termination settlement proposal, and DCAA’s level of review of proposed settlements
5:15 Conference Adjourns
DAY 2 – Tuesday, April 12, 2011
9:00 Opening Remarks from the Conference Co-Chairs
9:05 Managing DCAA Requests for Records and Employee Interviews: How to Respond and Cooperate while Safeguarding Your Rights
Kirk Saunders
Vice President, Government Accounting & Compliance
Shaw Environmental & Infrastructure, Inc.
(Baton Rouge, LA)
Nancy Turner
Director, Government Compliance
Orbital Sciences Corporation
(Dulles, VA)
Marcia G. Madsen
Partner, Mayer Brown LLP
(Washington, DC)
- Which employees DCAA has a right to interview and under what circumstances
- Lengths and limits of DCAA access rights to your paper and electronic records, including internal audit reports, audit committee meetings, SOX papers and third party work product
- When the DCAA Director will exercise subpoena authority to access records
- Deciding what documents to disclose and when you can include a summary
- Recordkeeping and retention practices to prepare for DCAA access requests
- Negotiating what information is provided to DCAA
- Safeguarding attorney-client privilege, and when a waiver of attorney-client privilege might be in your interests
- When DCAA will issue a “Denial of Access to Records due to Contractor Delays” letter and what to do next
- How to respond to audit findings, and when to appeal adverse DCAA audit findings
- When DCAA can make audit findings public through the press and/or other government agencies, or via the Freedom of Information Act
10:15 Networking Coffee Break
10:30 Validating Your Basis of Estimate to Prevent Disqualification: Satisfying Strict Requirements for Detailed Estimates instead of Forecasts
Jean Long
Director, Corporate Accounting
DynCorp International (Fort Worth, TX)
Peter A. McDonald, C.P.A., Esq.
Director, Navigant
(Vienna, VA)
- Techniques for generating a BOE: Structural, formatting and content pitfalls to avoid
- What triggers DCAA to deem a BOE as unsupported
- Providing detailed estimates for the life of the contract rather than forecasts/projections: How to satisfy DCAA’s enhanced requirements, and the requisite level of detail
- Supporting historical vs. forecasted data
- What triggers an audit of BOEs and what to expect
- DCAA’s approach to analyzing forecasted overhead, G & A expenses, labor rates, indirect and other costs
- When DCAA will audit data not used to support a proposal
11:30 When and How to Report Significant Overpayments, False Claims, Executive Compensation and Subcontractor Awards
Paul Robert
Associate General Counsel
Director Contracts & Compliance
United Technologies Corporation (Hartford, CT)
Terry L. Albertson
Partner, Crowell & Moring LLP
(Washington, DC)
- Reporting “top 5” executive compensation “by location”: How to comply and fi ll out the forms
- Recent trends in mandatory disclosures:
- frequency and scope, and how much is too much
- identifying a “significant overpayment”
- determining when “credible evidence” of a violation of federal criminal law or False Claims Act exists, and how far back you need to go to meet disclosure obligations
- what triggers mandatory disclosures of subcontractor violations, and how to report violations
- when a cost issue becomes a significant overpayment vs. a false claim
- when insignificant overpayments, mischarging and defective pricing need to be disclosed
- disclosing administrative errors
- Trends in penalty amounts and other outcomes of mandatory disclosures
- Reporting subcontractor awards: Reconciling reporting requirements with the need to safeguard proprietary information and trade secrets
- Preparing contractor business ethics and conduct programs to meet DCAA expectations
12:45 Networking Luncheon
2:00 Complying with GSA “Most Favored Customer”, Discount and Price Reduction Requirements
David A. Drabkin
Director of Acquisition Policy
Northrop Grumman Corporation
(Former Deputy Associate Administrator & Senior Procurement Executive, U.S. General Services Administration (GSA) (Washington, DC)
Jonathan S. Aronie
Sheppard Mullin Richter & Hampton LLP
(Washington, DC)
- What triggers the price reduction clause and how it is implemented
- Key pitfalls to avoid in applying and submitting discounts to GSA
- Streamlining commercial pricing to comply with “most favored customer” pricing requirement
- The consequences of violating the most favoured customer requirement, including Cisco case (settled for $48 million)
- Types of cost or pricing data required by GSA negotiators
- Determining a fair and reasonable price for the offered product or service
- How GSA conducts post-award audits: What they look for and how they review disclosures
- Scope of GSA access rights to your records
3:00 Penalty Update: The Costs of False Claims, Overcharging and Fraud Enforcement
Drew A. Harker
Arnold & Porter LLP
Defense Counsel in pending U.S. v. Oracle Corp. case
(Washington, DC)
- To what extent increased disclosure and reporting requirements place contractors on enforcement officials’ radar screens
- DOJ success levels for prosecutions and securing settlements for cost and pricing violations
- How relaxed requirements for proving false claims under FERA have been applied: Impact of recent qui tam and false claims cases dealing with cost and pricing issues
- Review of failed and successful defenses to false claims actions
- Cost and pricing inaccuracies and estimating practices that have led to allegations of procurement fraud
- How price reductions claims can escalate into fraud allegations under civil and criminal False Claims Act
- When the government is barred from making a claim against you due to the statute of limitations
- how the statute applies to claims regarding incurred costs audits, CAS and defective pricing
- does the statute run from the date of award or the discovery of a violation?
- how the statute applies to continuing, ongoing violations
- Managing U.S. DOJ investigations
3:45 CAS Compliance and Your Bottom Line: Avoiding Expensive Allocation Errors Affecting Profitability
Stephen Kiraly
Managing Director
LitCon Group, LLC (Alexandria, VA)
- Distinguishing between direct and indirect costs
- Key pitfalls to avoid when applying CAS 418-overhead, CAS 410-Gen & Admin expenses and CAS 420 (teaming agreements)
- What is cost impact data?
- What triggers a CAS audit by DCAA, and how to prepare
- Which types of contracts have been most susceptible to CAS violations and enforcement
- How penalties and daily compounded interest are calculated
- Measuring the impact of non-compliance on your contracts: When you need to “net” them
- How far back your liability could extend for contracts that are closed out
4:45 Conference Concludes
Post-Conference Interactive Working Sessions,
Wednesday, April 13, 2011
Working Session A – 9:00 a.m. - 12:30 p.m. Registration begins at 8:30 am
The Ins and Outs of Preparing for DCAA Audits: What You Need to Know Now Before It’s Too Late
Chad Connell
Director of Government Finance
Lockheed Martin − MS2 (Moorestown, NJ)
Mary Karen Wills
Argy, Wiltse & Robinson, P.C.
(McLean, VA)
With DCAA’s more rigorous, evolving approach to audits, you need to stay up to speed on what to expect, what can trigger a DCAA audit, the ins and outs of the audit process and tailoring your audit preparation accordingly.
At this interactive workshop, you will take away practical tools that will help your organization to successfully handle DCAA audits. The workshop leaders will provide you with case studies, speaker-prepared materials and Q & A to ensure that you gain best practices that you can apply to your daily work.
Topics will include:
- What has triggered DCAA audits and adverse audit findings
- How your preparation should change in light of recent changes to DCAA’s audit focus
- Managing the costs of audit preparation and management
- Preparing your organization for a potential audit, including audits of contractor ethics programs and internal control systems
- DCAA audit objectives and methods, techniques, and tools used to conduct the audit
- Recordkeeping and data storage: Centralizing and storing worldwide data in anticipation of an audit
- When the use of external legal counsel is necessary
- How outside and in-house counsel can work together to manage audit costs and other key items
- Which remedies are being imposed by DCAA for non-compliance
- Managing and resolving audit disputes
Working Session B – 1:30 p.m. - 5:00 p.m. Registration Begins at 1:00 pm
Conducting Cost or Price Analyses of Subcontractor Data from A to Z: How Far You Need to Go in Vetting, Selecting and Monitoring Your Vendors
Dr. Mike Criss
Senior Fellow
Fluor Government Group (Greenville, SC)
William Keating
Partner
Baker Tilly (Vienna, VA)
As DCAA heightens its expectations for subcontractor cost or pricing data, and the risk of disallowed costs continues to grow, it is critical to ensure compliance at the proposal stage and throughout the life of the subcontracting relationship. At this highly practical, intensive workshop, key experts will take you through the ins and outs of how to meet challenging cost or pricing data requirements and prevent critical pitfalls. Gain practical tools that you can apply to your daily work. Topics will include:
- What is a prime contractor’s obligation to conduct cost and price analyses of subcontractor proposals, and key pitfalls to avoid
- Subcontractor responsibilities to certify and submit cost or pricing data: Status and impact of proposed DoD rules
- Distinction between “price analysis” vs. “cost analysis”, and what is required for each
- Ensuring that your purchasing system processes can identify responsible prospective subcontractors and vendors
- What is required under FAR 15.404-3
- Key pitfalls to avoid in evaluating “price reasonableness” of subcontractor cost or pricing data
- Extent to which DCAA requests subcontractor cost or pricing data that is not required by regulation
- Negotiating with a contracting officer regarding the scope of required cost or pricing data
- To what extent a prime contractor can access a subcontractor’s records, including the status of their accounting systems, and when a subcontractor’s denial of access to records can be justified
- When and how to request assistance from the contracting officer to ensure a subcontractor’s compliance with CAS and FAR
- Monitoring and tracking overhead, G & A and other charges over the life of a subcontract: Recordkeeping and reporting do’s and don’ts
- Applying global indemnity clauses and contractual audit rights: To what extent a prime needs to emulate DCAA audit processes, and how to meet DCAA expectations
- How to assemble an internal audit team under strained resources, and when an independent review of subcontractor cost or pricing data is required
Conference Details