Major Government Contractor


Background

A leader in logistics and facility support services for the Department of Defense (DOD) and other government entities, this client was founded in 1989 and its corporate offices are located in Cape Canaveral, FL.  There are over 5000 employees worldwide with 450 US employees and two different benefit programs in place.  

Actions

Craford reviewed the available cost experience, rating methodologies and decisions for the 5 year non-compliance period.  Based on the study, Craford worked with the client to build a position demonstrating their rating decisions.  Claim reserves were reasonable and imposed no additional cost to the Government.

Challenges

DCAA audit showed that the client's self-insured plans were in non-compliance with CAS 416 and FAR 28 resulting in more than a $6 million increased cost to the Government.  This alleged non-compliance had spanned over a five year period.  For some years, rate calculations and decisions were developed internally without outside or expert actuarial and underwriting guidance and in some cases, documentation was incomplete. 

Results

Analysis was well-received by DCAA and DACO officials and shed light on possible oversight and misinterpretation of client information by DCAA during the audit.  DCAA and DACO officials agreed with the client to take the analysis findings into consideration and reconsider the audit findings.  A decision is pending.