In response to increasing pressure to reduce costs and improve operational efficiency, the Defense Contract Audit Agency has announced a comprehensive reorganization plan aimed at consolidating its Region and Corporate Audit Directorates (CAD). The restructuring, set to be completed no later than September 30, 2025, will reduce the number of field offices, streamline administrative structures, and refocus operations to better align with the needs of the Department of Defense.
The reorganization will introduce several key changes, including a shift to a new organizational structure with a central headquarters and three primary Directorates – Land, Sea, and Air. The new structure will merge the audit offices of the CADs into the Directorate that most closely aligns with their contractors’ products.
Additionally, a new Centralized Audit Function (CAF) will be established under the Policy, Quality, and Legislative Affairs Directorate. The CAF will focus on specialized audits and projects, offering a more centralized and targeted approach to this aspect of the agency’s work. Financial Liaison Auditors (FLAs) will also be reassigned to the Directorate that best supports their customer base.
In an effort to reduce operational costs, the agency will close and consolidate 40 smaller audit suboffices, many of which have fewer than 10 personnel. These offices will be combined with others, streamlining the agency’s physical footprint and cutting back on leases and associated costs. The total number of impacted employees is approximately 160. The move is expected to provide a more efficient workspace, foster enhanced teamwork and collaboration, and help the agency meet its goal of terminating at least 30% of its leases over the next three years.
“We assessed the viability of offices with fewer than 10 personnel, and the current structure with over 200 offices is no longer sustainable,” said Jennifer Desautel, DCAA Director. “Consolidation will enable us to better align our resources with our mission while delivering significant cost savings.”
Despite the financial and operational benefits, the reorganization, particularly the office closures, will have a significant impact on employees. Senior leadership has met with each individual who is impacted, and human resource specialists are working with these employees to discuss options and ensure that the transition is as smooth as possible.
“Any change of this magnitude will bring uncertainty and disruption, but we are committed to handling this process with transparency, compassion, and support,” said Ms. Desautel. “We recognize that this affects real people, and we will do everything in our power to ensure that those impacted are supported throughout the process.”
This reorganization represents the initial phase of efforts to improve operational efficiency and cost-effectiveness across the agency. Other efforts focus on technology and process improvement. Leadership emphasized that while the process will be challenging, it is an essential step toward achieving long-term success and positioning the agency to better meet the needs of the military and other stakeholders.
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