What is a DCAA Floor Check? A Guide for New Government Contractors

An auditor walks into your office unannounced, pulls one of your consultants aside, and asks a simple question. What are you working on right now? Then they check the answer against that person's timesheet.

That's a DCAA floor check. If you're new to government contracting, it's one of the first audit terms you'll hear and one of the least self-explanatory. Nothing about the phrase says "labor interview." But that's exactly what it is, and if you hold cost-reimbursable or time-and-materials contracts, one is probably in your future.

What is a DCAA floor check?

A floor check is an unannounced audit in which the Defense Contract Audit Agency (DCAA) interviews your employees to verify that timesheets reflect the work actually being done, in real time. DCAA calls these real-time labor evaluations, and they're a standard procedure (known as MAAR 6 in audit-speak) for contractors billing labor to the government.

Don't let the "Defense" in the name fool you. DCAA performs contract audits for dozens of federal agencies beyond the Department of Defense, so a floor check can land whether you're building software for the Army or advising a civilian agency.

The scale of this oversight is real. In fiscal year 2024, DCAA examined nearly $600 billion in contract costs and claimed $5.1 billion in net taxpayer savings. The agency exists to question costs. Your job is to give it nothing to question.

Why labor gets more scrutiny than any other cost

Here's the logic that makes floor checks make sense. When you bill the government for materials, there's an invoice. A paper trail. When you bill for labor, the only evidence that the work happened is your timekeeping system.

For a consulting firm, labor isn't just the biggest cost billed to the government. It's often the only cost. Which means your timesheets carry the entire burden of proof, and DCAA knows it. The floor check exists to test whether that proof holds up while the work is happening, not six months later when memories have gone soft.

What happens during a floor check?

The visit has two parts:

1. The interviews
2. The system review

1. The interviews

The auditor selects employees, usually without warning, and asks each one a short set of questions.

For example:

• What project are you working on right now?
• What charge code are you booking time to?
• How do you record your time, and how often?
• Do you know the firm's timekeeping policies?
• Who can change your timesheet, and how are corrections documented?

The auditor then compares the answers against the timesheet. If your consultant says they spent the morning on Contract A and their timesheet says Contract B, you have a finding. The interviews also confirm something more basic. That the person exists, works there, and is doing the work being billed. Floor checks are partly a check against ghost employees.

2. The system review

Alongside the interviews, the auditor examines the timekeeping system itself. They're looking for daily time entry, not Friday-afternoon reconstructions. Time entered by the employee, not an admin. A documented reason for every correction. Supervisor approval. A full audit trail.

What auditors expect from your timekeeping

The requirements aren't exotic. They're just strict. Employees record their own time, daily, against charge codes that map cleanly to contracts and tasks. Every change to a timesheet is documented, with a reason, and approved. The system keeps a complete history. Everyone in the firm can explain how it works, because the auditor will ask them, not you.

The pattern DCAA flags most often is exactly what you'd expect from a busy consulting firm. Employees not completing timesheets daily, unrecorded hours, and supervisors making unauthorized corrections. None of it is fraud. All of it is a finding.

What happens if you fail a floor check?

A failed floor check rarely ends your contract on the spot. What it does is worse in slow motion. Questioned costs. Payment withholds while issues are resolved. And in serious cases, a determination that your accounting system is inadequate, which can shut you out of cost-reimbursable work entirely. Under FAR 52.216-7, the allowable cost clause that sits in every cost-type contract, your ability to bill depends on records that stand up to exactly this kind of scrutiny.

The honest news is that most failures are process failures, not fraud. A firm with good habits and a system that enforces them has very little to fear from an unannounced visit.

How to be floor-check ready before DCAA calls

Readiness isn't a compliance project you run once a year; it's a byproduct of running your firm well. Build a daily time entry culture and hold everyone to it, including partners. Train employees so they can answer an auditor's questions without panicking. Run your own mock floor checks a couple of times a year, and use timekeeping software that produces the audit trail automatically, because the controls DCAA tests for (daily entry, documented corrections, approvals, full history) shouldn't depend on anyone remembering to do them.