Systemic Delay in Defense Contracting: A Case Study of the Defense Contract Management Agency's Contract Closeout Backlog from FY2015 to FY2020​​

Abstract

In this study, we analyze the Defense Contract Management Agency’s (DCMA) actions, from FY2015 to FY2020, to reduce a backlog of more than 72,000 overage flexibly priced contracts (FPC) that awaited administrative closeout. By working directly with the Defense Contract Audit Agency (DCAA) to align organizational priorities and deconflict internal procedures, the DCMA identified systemic delays in its closeout process and reduced the FPC backlog. Using historical data generated during the DCMA’s Material Weakness Initiative (MWI), our analysis focuses on the DCMA’s overall effectiveness in closing FPCs. The goal of our research is to provide defense contracting activities a roadmap to prevent future backlogs and reduce current backlogs. One main takeaway is the importance of aligning organizational priorities and deconflicting internal procedures between interconnected contract administration participants to close FPCs on time and efficiently. Three primary recommendations that stem from our findings are that defense contracting organizations should: (1) set organizational FPC closeout goals and use metrics to track closeout progress, (2) when multiple entities are involved, establish a process to track queued FPCs awaiting administrative action by all organizations, and (3) consider adding contract clauses that enable administrative contracting officers to efficiently close FPCs during the post-award phase. Additional recommendations for further research are also provided.