Defense Contract Audit Agency (DCAA)
The Defense Contract Audit Agency (DCAA) performs contract audits for DoD and, by agreement, other federal agencies. Under FAR 42.101 it is normally the responsible government audit agency for contractors other than educational institutions and nonprofits; its reports advise the contracting officer, who decides.
DoD Directive 5105.36 gives DCAA the contract audit mission: examine contractor records, systems, and compliance so contracting officers pay fair and reasonable prices. The agency dates to January 1965, when DoD consolidated the audit functions the military services had each run separately. Its Director reports to the Under Secretary of Defense (Comptroller), which keeps the auditors organizationally separate from the offices that buy.
The work spans the lifecycle: price proposal and forward pricing rate audits before award, preaward accounting system and business system examinations, incurred cost audits on flexibly priced contracts, and compliance audits under the Cost Accounting Standards and the truthful cost or pricing data statute. Under FAR 42.101, DCAA is normally the responsible government audit agency for contractors other than educational institutions and nonprofit organizations, and it audits for other agencies on request.
Two limits shape practice. Audits start with a request from a federal entity, never the contractor, so a company that wants its accounting system examined before proposing waits for a contracting officer to ask. And the reports advise: the auditor questions costs, but the contracting officer decides what to sustain.
Regulatory Reference
FAR 42.101; DoDD 5105.36
RFO Status
The Part 42 model deviation keeps subpart 42.1 and the 42.101 designation of DCAA as the normal responsible audit agency, edited into plain language; DoD adopted the model text with DFARS 242 through class deviation 2026-O0050 effective March 6, 2026, and Part 42 was not among the parts in the June 23, 2026 proposed rules.
Category
Processes & Methods
How AcqBot Helps
AcqBot preps both sides of an audit request: it drafts the request with the cost elements and records access the scope requires, and it tracks questioned and unsupported costs from audit report through negotiation so the contract file shows what the contracting officer sustained, what was overruled, and why.
Related glossary entries
Sources Sought Notice
A Sources Sought Notice is a pre-solicitation announcement, typically posted to SAM.gov, asking companies to identify their interest and capability to perform a prospective requirement — primarily used as market research to shape competition and set-aside decisions.
Request for Information (RFI)
A Request for Information (RFI) is a formal market research instrument used to gather industry input on capabilities, approaches, pricing structures, or draft requirements when the government is not yet ready to solicit — responses are voluntary and non-binding.
Lowest Price Technically Acceptable (LPTA)
Lowest Price Technically Acceptable (LPTA) is a source selection process that awards to the lowest-priced offeror whose proposal meets minimum acceptability standards — no credit is given for exceeding requirements, and tradeoffs between price and quality are not permitted.
Best-Value Tradeoff
The best-value tradeoff process permits award to other than the lowest-priced or highest-rated offeror when the source selection authority documents that the superior proposal's benefits are worth its price premium, or that a cheaper proposal's savings outweigh its weaknesses.