Nearly three-quarters (74%) of government contractors surveyed consider the government to be slow and inefficient in resolving contract issues, with 56% believing that the inefficiencies are caused by the Defense Contract Audit Agency (DCAA) and 18% saying it is caused by the contracting officer, according to Grant Thornton LLP’s 16th Annual Government Contractor Industry Survey .
“These findings were not unexpected given the changes in DCAA policy adopted in the aftermath of Government Accountability Office (GAO) reports issued in July 2008 and September 2009 that severely criticized the quality of the DCAA’s work,” noted Kerry Hall, Grant Thornton LLP’s Government Contractor practice leader. “The GAO reports and the DCAA changes that followed likely contributed to the survey findings, namely that the process of resolving contract issues is increasingly inefficient.”
More than half (55%) of government contractors reported that their revenue from federal business increased during the past year, while only 22% reported reduced revenue from federal business.
Other highlights of this year’s survey include:
- Revenue from the stimulus program — 72% of respondents anticipate no significant revenue growth from the stimulus program over the next 18 months, while the remaining 28% foresee modest growth.
- Identifying claims for out-of-scope work — 31% of government contractors consider their procedures for identifying out-of-scope work to be very effective, while 69% see them as being either somewhat effective or not effective. The failure to identify out-of-scope work effectively and seek related compensation may contribute to reduced profit rates.
- Bid protests — A total of 22 bid protests were filed during the past year by companies surveyed, and 11 of them were sustained by the GAO or the court hearing the bid protest. This appears to be a higher sustainment rate than has historically been the case and could possibly signal an emerging trend.
For more information regarding Grant Thornton LLP’s16th Annual Government Contractor Survey, contact Margaret Jackson at 703.637.4088 orMararget.Jackson@us.gt.com. A summary of the survey is available for download at www.GrantThornton.com/govcon.
— Released Jan. 17, 2011
