Estimating System Audit

Scope

Reviews the estimating policies and procedures, organizational structure of the estimating function, integration between estimating and accounting systems, proposal preparation processes, and historical accuracy of estimates versus actual costs. Tests specific proposals to evaluate estimating methodology, data sources, and reasonableness of assumptions.

Frequency

Typically conducted every 3-5 years for major defense contractors, or when triggered by significant estimating deficiencies identified during other audits or contract negotiations. May be accelerated if proposal audit findings indicate systemic estimating problems.

What to Expect

Auditors review the estimating system documentation, test a sample of proposals against actual costs, and evaluate the contractor's estimating practices for consistency and accuracy. The audit may result in a finding of "significant deficiency" requiring corrective action. Contractors with significant deficiencies may face a 5% withhold on billings until the deficiency is corrected.

Key Documents

• DFARS 252.215-7002 — Cost Estimating System Requirements
• Estimating policies and procedures manual
• Proposal preparation guidelines
• Historical proposal-to-actual cost comparisons
• Estimating organization chart and qualifications

Other pre-award Audits

Other DCAA Audit Types