Definition

Defense Contract Management Agency (DCMA)

Contributor(s): Kate Brush

The Defense Contract Management Agency (DCMA) is a component of the United States Department of Defense (DoD) that works with defense contractors to ensure government services and supplies are delivered on time, come at the expected cost and satisfy all performance requirements. The agency oversees the administration of origin inspection contracts, dispatches quality assurance (QA) reports, and audits and monitors subcontracting plans.

The primary goals of the DCMA include guaranteeing the quality of services, supplies, equipment and support; ensuring services and supplies comply with all standards and regulations; and confirming that the contractor fulfills all requirements included in their contract. The DCMA is necessary to ensure the U.S. government receives the services it needs and that the military is fully supported and ready to complete their mission objectives. The DCMA also helps guarantee the work of these other departments, governments and agencies does not negatively impact the public.

To achieve these goals, the DCMA has developed a collection of policies and procedures that allow their auditors to determine compliance under two policies -- one for shipment identification and one for asset identification. Standards have also been established to help evaluate a contractor's systems and processes for managing their item's unique identifier (UID) and radio frequency identification (RFID) requirements. In addition, the DCMA uses a 14-point assessment to ensure high-quality schedules are created and followed to improve the probability of a successful outcome.

The DCMA was previously called the Defense Contract Management Command (DCMC), but its name was changed to the Defense Contract Management Agency in March of 2000 when it was established independent of the Defense Logistics Agency. The DCMA currently has around 12,000 employees -- mostly civilians -- who work at offices and contractor facilities all over the world.

What does the DCMA do?

The Defense Contract Management Agency can be considered a product delivery organization. It provides auditing, systems engineering, QA oversight and earn value management (EVM) of DoD contractors. The work performed by the DCMA is an essential part of the contractor acquisition process, form the pre-award phase of the contract through the contract's duration.

The DCMA also ensures contracts comply with the Defense Federal Acquisition Regulation Supplement (DFARS). The DFARS implements and adds onto the Federal Acquisition Regulation (FAR), which is a set of rules for contracting with the federal government. The DFARS includes requirements of law, DoD-wide policies, assignments of FAR authorities, digressions from FAR requirements and policies or procedures that significantly affect the public.

In addition, the DCMA performs Contingency Contracts Administration Services (CCAS) for several forward operating bases (FOB). An FOB is a secured and active military position -- usually a military base -- that is used to assist strategic objectives. CCAS involves managing, executing and supervising a contract in a contingency environment.

Before awarding a contract, the DCMA must:

  • provide advice to create effective contractor solicitations;
  • determine any potential risks in working with specific contractors;
  • provide contractor recommendations; and
  • write contracts that fulfill the needs of the government.

After the contract has been awarded, the DCMA is responsible for:

  • providing the DoD with contract administration services (CAS);
  • monitoring the contractor's performance, including schedule, cost and product performance;
  • providing on-site representatives for the military and other federal buying agencies; and
  • closing out contracts.

In addition to these responsibilities, DCMA representatives routinely visit contractors -- both before the contract is awarded and throughout its lifetime -- to ensure the contracts fulfill government standards and needs, identify potential risks, and verify that all terms and conditions of the contract are satisfied.

Who does it report to?

The DCMA reports to the Under Secretary of Defense for Acquisition and Sustainment. The Department of Defense is the parent agency of the DCMA, but the Defense Contract Management Agency also serves the National Aeronautics and Space Administration (NASA) and other state, federal, foreign and international governments and agencies. The DCMA works with these organizations to ensure that DoD, federal and allied government supplies and services are delivered on time and at the expected cost, while also satisfying all performance requirements.

DCMA 14-point assessment

The DCMA 14-point assessment provides a set of guidelines to use when inspecting a schedule. The assessment can be used to analyze a variety of schedule types, including EVM and projects outside the government contracting sphere.

The assessment offers project managers a beneficial way to objectively analyze the quality of a schedule throughout the project's lifetime. The 14 points are not to be used as strict rules but should instead be used to identify potential problem areas where a deeper investigation of the schedule may be necessary.

Satisfying all 14 points does not make the schedule feasible; however, not satisfying all the points almost guarantees the schedule will not be successful. Project managers should routinely perform the assessment to optimize on-time project performance.

The DCMA 14-point assessment includes:

1. Logic. This point confirms all incomplete tasks have defined predecessors and successors. One missing link can impact the project completion date, so all dependencies in the schedule must be determined. The DCMA's threshold for this metric states that no more than 5% of incomplete projects should be missing a predecessor and/or successor.

2. Leads. A lead is a negative lag -- or negative delay -- between two tasks, during which, one task starts several days before the predecessor is finished. The DCMA threshold for this metric is zero because leads can significantly impact the ability to determine the true critical path.

3. Lags. A positive lag occurs when one task starts several days after its predecessor is finished. Positive lags can also negatively affect analysis of the project's critical path. Lags can also be confusing if their reason is not immediately understood. The DCMA has set the threshold for positive lags at 5% of the total task relationships.

4. Relationship types. The DCMA's preferred relationship type between tasks is the finish-to-start relationship, in which one task cannot begin until its predecessor is finished. Sequencing all tasks in the schedule this way will provide the clearest understanding of the critical path. However, there are situations where other relationship types are appropriate.

These other types include start-to-start and finish-to-finish relationships, in which one task cannot start or finish until its predecessor is started or finished. These relationships can be used when they correspond with the true dependency of the tasks; however, they should not be used to schedule tasks in parallel that are not dependent on each other.

In addition, start-to-finish relationships -- in which one task cannot finish if its predecessor has not started -- should only be used in extreme, rare cases because they can impede the logic of the schedule.

5. Hard constraints. Constraints -- or limitations and restrictions -- should be used sparingly when creating a schedule. Task dates should be the natural result of task dependencies and duration. Soft constraints -- such as "start no earlier than" and "finish no later than" -- are preferred over hard constraints -- such as "must start on" and "must finish on" -- because they allow the schedule to be logic-driven. The Defense Contract Management Agency sets a threshold that limits incomplete tasks using hard constraints to 5% of all incomplete activities.

6. High float. Float is the amount of time that a task can be delayed without affecting subsequent tasks. The DCMA defines a high float value to be 44 days or more. High float is typically the result of missing dependencies within the schedule. The DCMA threshold for this metric is 5% of incomplete activities.

7. Negative float. A negative float occurs when the schedule predicts a missed deadline or when a hard constraint is holding a task back. Negative float represents that a future critical date is likely to be missed and that measures need to be taken to get the schedule back on track. The DCMA sets the ideal negative float threshold at zero.

8. High duration tasks. Incomplete tasks should not exceed a baseline duration of 44 days. Activities that last beyond this time period will make it challenging to estimate the required resources and assess performance. To avoid high duration tasks, activities can be broken down into a series of shorter responsibilities. The DCMA threshold for this metric is 5% of incomplete activities.

9. Invalid dates. This point only applies to the execution of a project. A task has invalid dates if its future work dates are in the past and its completed work dates are in the future -- related to the project status date. This is one of the more critical metrics to consider because tasks with invalid dates can indicate that the rest of the schedule is weak. The DCMA sets the threshold for this metric at zero.

10. Resources. Resource loading -- or assigning resources to each task -- is not a requirement, but the DCMA prefers schedules that are resource- and cost-loaded. However, there are situations where resource loading is unnecessary because a task has a duration greater than zero, but no associated work -- including activities like customer review of deliverables or procurement lead-time.

Because resource loading is not necessary, the metric's threshold is flexible. However, organizations that practice resource loading should continue to evaluate the metric to ensure no tasks are missed during the resource estimation process.

11. Missed tasks. This metric represents the schedule performance compared to the baseline plan. Missed tasks refers to the percentage of activities that were expected to have finished as of the project's current status date, but that have actual or forecasted finish dates later than those in the baseline schedule. The DCMA threshold for this metric is 5%.

12. Critical path test. This is a Boolean pass/fail metric that is used to evaluate the integrity of the schedule's network logic. First, the critical path of the schedule is identified. Then, an amount of schedule slip -- or a disruption to the planned schedule -- is introduced to delay the first task. If a comparable amount of schedule slip occurs in the project's finish milestone, then the critical path test has passed. A failed test represents missing dependencies and often leads to a deeper analysis of the network logic.

13. Critical path length index (CPLI). The CPLI measures the efficiency required to complete a project. It is found by taking the sum of the remaining project duration -- or the number of working days remaining on the critical path -- and the total float, and then dividing the value by the remaining project duration. In this scenario, the total float refers to the variance between the forecasted and baseline finish dates of the project.

A CPLI value of 1 means that the schedule must proceed exactly as planned for the remainder of the project. A value above 1 reveals that there is a remaining schedule margin. A value below 1 shows that the team must overachieve if they want to finish by the baseline finish date. The DCMA cautions that a CPLI below 0.95 could mean there is a potential issue that requires further analysis.

14. Baseline execution index (BEI). The BEI is a warning indicator that reveals when a schedule is at risk of not meeting its deadline. It is calculated by dividing the total number of completed activities by the total number of tasks that were expected to be complete as of the project status date.

A BEI of 1 means the team is performing on plan, a value above 1 reveals the project is ahead of schedule and a BEI below 1 means the project is behind schedule. Similar to the CPLI, the DCMA considers a BEI below 0.95 to be symptomatic of a possible issue that needs further investigation.

The difference between DCMA and DCAA

Both the Defense Contract Management Agency and the Defense Contract Audit Agency (DCAA) originated from the DoD and focus on assisting the Department of Defense with their contract business; however, the two agencies have different responsibilities.

The DCMA works directly with contractors. The agency's primary responsibility is ensuring the government receives the highest quality supplies and services on time and at the greatest value for their dollar. The DCMA is active in both the pre-award period and throughout the contract performance period.

On the other hand, the DCAA focuses on providing the DoD with two major services: auditing and negotiation assistance. Within auditing services, the DCAA is responsible for:

  • pre-award audits, including price proposals, surveys and forward-pricing labor and overhead rates;
  • post-award audits, including collected costs and annual overhead rates, CAS compliance and adequacy, floor checks, claims and Truth in Negotiation Act compliance; and
  • contractor business system audits, including accounting, billing, estimating, material management and electronic data processing.

Within the negotiation assistance services, the DCAA is responsible for finding and analyzing contractor information and providing procurement liaison assistance.

This was last updated in March 2020

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