I know DCAA, DCMA, etc all audit constantly. New rates are issued at random times throughout the fiscal year.
I have worked now for 2 multi billion dollar defense contractors inside the beltway doing proposal work. I know how the system works and its a major fraud to the American tax payer.
Unallowable costs typically end up being if you are stupid enough to put on your reciept “Bunny’s adult entertainment club”
All contractors low ball the hell out of their proposal and request change orders over the life of the contract to “get well.” Overworked and incompetent CO’s agree, and boom the tax payer is getting fleeced while the CEO’s of these contractors are making 10s of millions off the tax payer.
I view them (the CEOs and high levels of these contractors) the same way I view welfare queens-useless people living off the dole of the government
It is a bit more complicated than you are representing.
Unallowables are tracked very closely, and there are a lot of legitimate expenses in the commercial business world that are unallowable on government contracts.
A big part of the “overhead” and administrative costs that are factored in and recovered is the extreme cost of compliance with all the ridiculous and excessive regulatory costs associates with government contracts. Certifications, internal and external audits, and various other oversight costs mandated by the government impose significantly greater costs on governemnt contracts than all the fraud and greed and abuse that the executives could even dream up.
If you have direct knowledge, you should report it - there’s a 10% finder’s fee for any waste fraud or abuse you report.