Contract Audit

The Contract Audit section has a supportive role for procurement activities within the defense sector. This section conducts audits of contracts and financial contractor reviews.


​​​Contract Audit is involved primarily in situations when only a sole supplier can perform the contract and Contract Audit assesses criteria to ensure compliance due to the lack of sufficient competition. Moreover, Contract Audit is involved in contracts when there is a reasonable suspicion that price fixing, cartels or other anticompetitive activities may be.

The section’s main task is to ensure that defense suppliers comply with the framework set forth in Procurement Regulations for the Armed Forces (ARF). The section considers the vendor’s costs of carrying out a contract, based on the rules provided in Section 17 of ARF as well as the recognized standards and principles of corporate financial internal and external accounting. The auditor submits the Contract Audit findings within a report to the client stating Contract Audit conclusions and recommendations.

The Contract Audit section is the supervisory authority in the field of analysis, testing costs, financial supplier assessments and financial contractor reviews. Assigned tasks are performed on behalf of the contract departments in various branches of the Norwegian Defense Material Agency, other agencies in the defense sector and foreign military authorities. The section’s activities are regulated according to the ARF and the Directive for the service.


Financial supplier assessments are focused reviews of a supplier or a potential supplier’s financial status. Supplier assessments are based on the rules set forth in ARF Section 18 entitled Vendor Analysis.  Supplier assessments are performed in order to prevent contracting with a vendor in a weak financial position that most likely cannot complete delivery according to the contract. The Contract Audit section during an assessment of an existing supplier promulgates recommendations for specific initiatives and actions to be undertaken by the procuring authority to minimize any effect resulting from a supplier’s changed financial position during the performance of the contract.

A detailed financial analysis is mostly based on publicly available information – financial reporting, public accounts and notes, stock market information, media coverage, broker’s reports and prospectuses. The Contract Audit section also has access to internet based databases including regulatory authorities. An extended analysis assumes that internal company information is used. Additionally, conversations with management, business strategy, pro forma statements and budgets are important elements to the analysis.

The auditor submits the Contract Audit findings within a report to the client stating Contract Audit conclusions and recommendations for further evaluation of the supplier.


The Contract Audit section performs its’ function in autonomy and is independent of any account guidance or direction from the client that may affect the auditor’s professional skills and judgment. The auditor obtains only the necessary information from the client and the supplier to carry on its’ activities for a due diligent assessment of the vendor’s costing approach.