ASBCA Puts Auditor's Exec Pay Calculation Methods In Peril

Law360, New York (February 14, 2012, 7:37 PM EST) -- The Armed Services Board of Contract Appeals has sharply rebuked the Defense Contract Audit Agency over its method for calculating appropriate contractor executive pay, casting doubt on whether the Pentagon's auditing arm can continue to use its long-standing methodology, attorneys say.

The methodology used by DCAA auditors, which allows contractors to charge 10 percent more than an industry average taken from pay surveys, is spelled out in the DCAA's audit manual and has been used for decades without serious challenge, attorneys said. But the ASBCA's decision — issued last month after...
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