Missile Defense Agency and Defense Microelectronics Activity Use of Cost‑Reimbursement Contracts

Our objective was to determine whether Missile Defense Agency (MDA) and Defense
Microelectronics Activity (DMEA) contracting personnel complied with interim Federal
Acquisition Regulation (FAR) revisions regarding the use of cost-reimbursement
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contracts. Specifically, we determined whether MDA and DMEA contracting personnel
implemented the interim rule by documenting:
• that approval for the cost-reimbursement contract was at least one level
above the contracting officer,
• that the use of cost-reimbursement contracts was justified,
• how the requirements under the contract could transition to firm-fixed-price
in the future,
• that Government resources were available to monitor the cost-reimbursement
contract, and
• that contractors had an adequate accounting system in place at contract
award.
We also determined whether MDA and DMEA personnel intentionally misclassified
contracts as firm-fixed-price