DCAA by its Memorandum dated October 18, 2010 increased the threshold for conducting audits on price proposals to $10 Million for fixed price proposals and $100 Million for cost type proposals. The only exception is under exceptional circumstances outlined in the contracting officer audit request letter.

I agree with this development as it reduces potential audits on small insignificant proposals. This may prove beneficial to small businesses. However, small businesses must still develop its proposals in a manner that is compliant with cost or pricing data requirements. The upside is there should be less audit activity on smaller proposals resulting a more streamlined approach to contract negotiations.