A GSA Office of Inspector General (OIG) audit is more than a compliance check—it is a test of whether your commercial practices, systems, and controls can withstand scrutiny. With audit findings often tied to False Claims Act (FCA) risk, and with the Department of Justice (DOJ) continuing to emphasize corporate responsibility through its Evaluation of Corporate Compliance Programs (ECCP), contractors must approach readiness with a broader mindset. Audit preparation is not just about avoiding findings—it is about demonstrating integrity, building resilience, and protecting long-term contracting opportunities.
Understanding the Risks
- Employee Qualifications Under Review
The GSA OIG is focusing heavily on whether resumes and employee qualifications align with billed labor categories. Inadequate documentation, resume gaps, or staff billed in roles they are not fully qualified for can trigger refunds—and in some cases may be viewed as knowing misrepresentation under the FCA.
Best practice: Strengthen resume verification processes during onboarding and before billing. Build auditable records that show employee qualifications were confirmed at the time of performance. DOJ’s ECCP emphasizes that compliance must be integrated into operations, not treated as a one-off task.
- Increased Scrutiny on Pricing and Discounts
Price Reduction Clause compliance remains one of the highest-risk areas. Discounts extended to non-GSA customers below the GSA Basis of Award without corresponding adjustments can lead to repayment obligations and potential FCA exposure. Inconsistent monitoring, lack of standard labor category mapping, and inadequate documentation remain common findings.
Best practice: Implement systematic discount monitoring. Standardize how categories are mapped, compare discounts across customer classes, and retire outdated labor categories. Transparency and consistency reduce audit exposure and align with DOJ expectations of continuous improvement.
- IFF Reporting and Accuracy
Auditors continue to identify gaps in Industrial Funding Fee (IFF) reporting. Errors, whether overreporting or underreporting, create repayment obligations and can escalate to allegations of recklessness if systemic issues exist.
Best practice: Explore automation to simplify quarterly reporting, establish cross-checks for manual adjustments, and document rationale for sales adjustments. Demonstrating improvement in reporting accuracy over time reflects the DOJ’s principle that compliance programs must evolve and work in practice.
- Rate Justifications Under Pressure
OIG reviews of Time & Materials (T&M) cost accumulation and labor rates frequently result in recommendations for rate reductions. Unsupported or inflated rates can lead to disallowances, lost revenue, and potential findings of material misrepresentation.
Best practice: Prepare defensible rate files in advance. Document the market data, unique qualifications, and rationale behind high-impact labor categories. Anticipating audit challenges and building justification proactively demonstrates good faith and strong internal controls.
Strategic Actions for Success
- Engage Leadership Early
Tone at the top matters. DOJ’s ECCP specifically asks whether leadership demonstrates commitment to compliance in practice, not just words. Engage leadership early in audit preparation by sharing findings, securing resources for corrective actions, and setting deadlines for remediation. Visible commitment reduces risk and builds credibility with auditors.
- Conduct Mock Audits and Remediate Gaps
Mock audits are a critical step to identifying weaknesses before OIG does. The DOJ expects organizations to conduct root cause analysis—distinguishing between isolated incidents and systemic failures—and to remediate effectively. Running a mock review of Commercial Sales Practices (CSP) disclosures, discount monitoring, and labor qualifications not only uncovers risks but also demonstrates proactive compliance.
- Strengthen Pricing and Monitoring Controls
Pricing practices must be actively managed. A repeatable process for mapping labor categories, comparing discounts, documenting rationale, and retiring outdated categories provides a defensible audit trail. More importantly, it shows continuous improvement, which is the very standard DOJ evaluators use to assess whether a compliance program is effective.
- Build a Proactive Rate Defense
Do not wait until auditors propose reductions. Anticipate which categories are likely to be challenged and prepare detailed defense files supported by market data and internal records. Engage experienced consultants where necessary. A prepared rate defense demonstrates that your company is not only compliant but strategic in managing its contracts.
- Positioning for Audit Readiness
The intersection of OIG audits, FCA liability, and DOJ compliance principles creates both risk and opportunity. OIG findings are no longer just contractual. They can serve as the foundation for FCA allegations if auditors determine there was reckless disregard or systemic noncompliance. The DOJ’s ECCP reminds us that regulators look at three questions:
- Is your program well-designed?
- Is it applied in practice?
- Does it work in reality?
Contractors who align their audit readiness with these standards will not only reduce liability but also strengthen their competitive standing in the federal marketplace.
Conclusion
Audit readiness is more than compliance—it is risk management and strategic positioning. By embedding FCA awareness and DOJ compliance expectations into daily operations, contractors demonstrate good faith, protect against liability, and build resilience for future growth.
At Blue Alchemy Consulting, we help contractors prepare for OIG audits with strategies that meet and exceed federal expectations. Our approach strengthens compliance, mitigates FCA risk, and positions your company for success in every GSA review.
