Contractors survey: Agencies slow in resolving contract issues

Tuesday - 1/18/2011, 3:13pm EST

Kerry Hall, Government Contractor Practice Leader, Grant Thornton

Click to hear the interview.

Download mp3

A new survey found that most government contractors believe that the government is to blame for slow and difficult resolutions to contract issues.

Grant Thornton's 16th annual Government Contractor Industry Survey found that nearly three-quarters of contractors surveyed believe the government is slow and inefficient in resolving contract issues.

Kerry Hall, Grant Thornton's Government Contractor practice leader, joined the DorobekINSIDER with details of the report's findings:

  • DCAA to blame?
    56 percent said that inefficiencies are caused by the Defense Contract Audit Agency.

    DCAA was the subject of "scathing reports" in 2008 and 2009 from the Government Accountability Office that criticized DCAA's emphasis on production metrics rather than quality work, Hall said.

    Grant Thornton will be monitoring if the relationship between DCAA and contractors will reach a "happy medium," Hall said.

  • Bid protests
    The report also found 22 bid protests were filed during the past year by companies surveyed, and 11 of them were sustained by the GAO or the court.

    "This appears to be a higher sustainment rate than has historically been the case and could possibly signal an emerging trend," according to the Grant Thornton website.

    "In the full survey, we indicate it does appear to be a trend that we'll be monitoring going forward," Hall said.

  • Out-of-scope work
    A majority (69 percent) of contractors say prodecedures for identifying out-of-scope work is somewhat effective or not effective. The remaining 31 percent said these procedures are highly effective.

    Changes in the scope of work can be directed from the government customer or come from indirect changes, Hall said.

    For the contractor, identifying such changes is critical for the business to be paid for the additional work, he said.

  • Revenue growth from stimulus
    72 percent of respondents anticipate no significant revenue growth from the stimulus program over the next 18 months, and 28 percent anticipate a modest growth.

    The impact of the stimulus "has yet to be seen," because much of the initual spending is still in the procurement cycle, Hall said.

    "I think we'll see more of that in the next year, the third year of the stimulus package," Hall said.