Divisional Administrative Contracting Officer (DACO)

A Divisional Administrative Contracting Officer (DACO) is a government contracting officer responsible for administering contracts at a contractor's division, segment, or plant level. DACOs oversee contract performance, compliance, and business systems within a specific organizational unit of a contractor.

What Is a Divisional Administrative Contracting Officer?

A DACO is a warranted contracting officer assigned to manage and administer contracts after award, typically within large, multi-division contractors.

Unlike a Procuring Contracting Officer (PCO), who awards contracts, a DACO focuses on contract administration, compliance oversight, business system reviews, indirect rate agreements, and post-award performance monitoring.

Core Responsibilities

Contract Administration: DACOs are responsible for monitoring contract performance, approving contract modifications, addressing compliance issues, and resolving disputes at the administrative level.

Division or Plant-Level Oversight: DACOs are typically assigned to a specific contractor division, production plant, or corporate segment. This structure allows them to maintain detailed oversight of cost accounting systems, material management systems, purchasing systems, and estimating systems.

Business Systems Compliance: DACOs often oversee contractor business system reviews, particularly for defense contractors subject to DFARS 252.242-7005. They may coordinate with the Defense Contract Audit Agency and Defense Contract Management Agency.

Regulatory Framework

DACO authority derives from:

Federal Acquisition Regulation (FAR)

Defense Federal Acquisition Regulation Supplement (DFARS), when applicable

These regulations define contracting officer authority, responsibilities, and limitations.

Practical Examples

A DACO negotiates final indirect cost rates for a defense contractor division

A DACO issues a unilateral contract modification following an audit finding

A DACO reviews a contractor's purchasing system for compliance deficiencies

A DACO approves forward pricing rate agreements (FPRAs) at the division level

DACO vs. PCO

Procuring Contracting Officer (PCO): Awards contracts, conducts source selection, and negotiates initial contract terms.

Divisional Administrative Contracting Officer (DACO): Administers contracts after award, oversees business systems, negotiates indirect rates, and manages ongoing compliance. The two roles serve different phases of the contract lifecycle.

Common Misconceptions About DACOs

DACOs award contracts.

They administer contracts after award. PCOs handle contract awards.

DACOs only handle paperwork.

They often oversee financial systems, audits, and indirect cost structures.

Only defense contractors deal with DACOs.

While common in defense, other federal agencies may use similar administrative structures.

Frequently Asked Questions

What distinguishes a DACO from an ACO?

A DACO is assigned at the division or plant level within a multi-segment contractor, while an ACO may operate more broadly. Both focus on post-award administration.

What should contractors expect when working with a DACO?

Regular compliance oversight, business system audits, indirect rate negotiations, and formal communication through written modifications.

What business systems does a DACO typically review?

Cost accounting systems, material management systems, purchasing systems, and estimating systems subject to DFARS business system requirements.

Why is documentation important when interacting with a DACO?

DACOs make determinations on cost allowability, compliance, and contract modifications. Strong documentation protects contractors during audits and dispute resolution.