US says defense contract audits changed on pressure from military contractors, Pentagon

Auditors at a U.S. Defense Department oversight agency forced changes to unfavorable reports on contracts with some of the nation's largest defense companies, hid contractor overbilling and attempted to hinder an investigation into the alleged problems, according to a new report. The Government Accountability Office report, released Wednesday, reviewed audits by the Defense Contract Audit Agency and found examples where pressure by contractors and senior agency auditors led to changes in initial reports that detailed problems with contracts. In 2002, DCAA auditors allegedly made an upfront agreement with a "major aerospace company" to limit the scope of a review of the contractor's estimate system. When the audit still uncovered problems, the contractor complained, prompting the removal of one auditor working on the case and... [read full story]