Government Contracting Resources » audit

Defense Federal Acquisition Regulation Supplement: Proposal Adequacy Checklist (DFARS Case 2011-D042

tdiguiseppe — Mon, 05 Dec 2011 14:24:52 +0000

While most would think that the 47 items on the proposed adequacy check list were already being done, the DoD’s Better Buying Power initiatives group did not think so therefore it is proposing to formally include the check list in the DFARS as a requirement for any proposal requiring Certified Cost or Pricing data to protect the Government against a perceived deficiency in the proposal evaluation process.

The only thing this will accomplish is to greatly extend the timeline and cost from RFP to contract award without any real measurable benefit to the Government.

DoD reasoning is quoted below.

“This proposed rule supports one of DoD’s Better Buying Power initiatives by incorporating the requirement for a proposal adequacy checklist into the Defense Federal Acquisition Regulation Supplement (DFARS) at section 215.408, and an associated solicitation provision at DFARS 252.215–70XX, to ensure offerors take responsibility for submitting thorough, accurate, and complete proposals. The provision should be included in solicitations that require the submission of certified cost or pricing data.”

Clink this link for a copy of the Federal Register

Contractor Exposure for False Claims Act Violations During Contract Disputes Increases

tdiguiseppe — Wed, 17 Aug 2011 16:14:56 +0000

The attached article by Hal Perlof, Esq., of Husch Blackwell provides important information on how a recent court ruling can significantly increase contractor risks for False Claims Act (“FCA”) violations during contract disputes.

Mr. Perlof also provides a very good description of what criteria has to be met before bringing an FCA violation claim and how the new ruling changes the game.

A must keep article for your business files.

Click here for a copy of the article

Non-Discrimination in Compensation – Compensation data collection Tool

tdiguiseppe — Wed, 10 Aug 2011 14:26:29 +0000

The Obama’s administration early announcement that they will be proposing a new data collection rule related to “Compensation Discrimination”. This is another attempt on the part of DOL and the Obama’s administration to force contractors to report data on employee and management compensation under the guise of identifying and preventing compensation discrimination. In reality it is a back door effort to force government contractor to either become unionized or to pay wage scales dictated by the union. If also smacks of the heavy handed approach
to government dictating how business are to pay their employees. This is no different than DOL efforts to tell Boeing where it can set up business operations and that any effort to operate in Right to Work states will be met with lawsuits from DOL.

You have an opportunity to comment, please use it. However, the only real way to prevent this proposed rule from becoming finalized it to contact your Congressional Representative loudly and
often. Because this is another attempt to kill capitalization by the Obama administration.

Click here for a copy of the Fed Reg announcing this proposed rule

CAS exemption for contracts performed outside the US no longer applies

tdiguiseppe — Wed, 10 Aug 2011 14:17:30 +0000

You will remember that a few months back I sent out a news alert about a proposed rule to remove the exemption from CAS for contracts performed outside the US. The proposal rule is not finalized.
Performing a contract entirely outside the US no longer exempts the contract for CAS coverage if under normal circumstance the contract would be CAS qualified.

Click here for the Feg Reg publication of the final rule

Determining Manufacturing Readiness Risk as part of the Source Selection process

tdiguiseppe — Mon, 01 Aug 2011 16:42:08 +0000

DFARS (DFARS Case 2011-D031) is proposing that as part of the source selection process, manufacturing readiness and manufacturing-readiness processes of potential contractors and subcontractors, be considered for major defense acquisition programs (MDAP).

Of course nothing in the proposed rule, as described in the Federal Register, defines what manufacturing readiness and processes are and how that will be measured/determined during the source selection process.

Most likely DoD is floating this rule out there to get major manufactures input, through their comments, on how this would work, and what the parameters should be.

While most major prime contractors would be able to address this potential issue, it is the subcontractors on such MDAP that need to be concerned about the proposed rule. Because it would not be the CO obtaining this information during the source selection process, but the prime obtaining the information from prospective subcontractors. This could expose the subcontractors intellectual property as it relates to its manufacturing processes, to the prime.

This could put the subcontractor at a significant negotiating disadvantage with the prime. Another area, from this administration, in a long line of new risks being faced by subcontractors.

Tim Di Guiseppe

Click here for a copy of the Federal Register and info on where to submit comments

Understanding the Truth in Negotiation Act (TINA)

tdiguiseppe — Thu, 02 Jun 2011 19:34:35 +0000

A white paper on the Truth in Negotiation Act and what it means to you as a Government Contractor

Click here for access to the paper on TINA

Contracting with the U.S. Government

tdiguiseppe — Wed, 18 May 2011 17:25:16 +0000

A great paper by Rod Marvin, Esq., of Cohen and Mohr, on all aspects of doing business with the Federal government and how best to be successful in this market. While it is a long paper, it is a great resource to keep in your files for a reference tool on the many requirements of doing business with the government.

Click here for a copy of the White Paper

DFARS 252.242-7005 Contractor Business Systems Interim Rule

tdiguiseppe — Wed, 18 May 2011 17:15:42 +0000

This proposed DFARS is out for a third set of comments. While the attached Federal register summarizing the previous
comments on this propose rule is long, it gives some great insight into the position DoD COs will take when determining adequacy of a particular business system and what if any monies will be withheld due to identified inadequacies.

Under this rule:

A) DoD is defining contractor business systems as accounting systems, estimating systems, purchasing systems, earned value management systems (EVMS), material management and accounting systems (MMAS), and property management systems.

B) DoD is implementing compliance enforcement mechanisms in the form of a business systems clause which includes payment withholding that allows contracting officers to withhold a percentage of payments, under certain conditions, when a contractor’s business system contains significant deficiencies. Payments could be withheld on—

Interim payments under—
Cost–reimbursement contracts;
Incentive type contracts;
Time-and-materials contracts;
Labor-hour contracts;
Progress payments; and
Performance-based payments.

The Discussion and Analysis section of this Federal Register contains a insight into DoD position as it relates to the business systems listed above, the process of determining adequacy, contractor appeals, DCAA audits and follow up audits.

While this is out for comment until July 18^th, CO payment withholding due to system inadequacies is part of the future.
Understanding what that means and how to ensure your systems are not caught up in this process are important to the financial wellbeing of your company.

Tim

Click here for a copy of the Federal Register

Federal Acquisition Circular 2005-50 – Ten Interim and Final FAR rules that impact most contractors

tdiguiseppe — Wed, 16 Mar 2011 17:11:34 +0000

Attached is a copy of the Federal Acquisition Circular 2005-50 publishing interim and final rules effecting everyone.

The first rule of concern is “Proper Use and Management of Cost-Reimbursement Contracts (Interim)” significantly increases the threshold for COs to justify the use of Cost-Reimbursement contracts over fixed priced contracts. Expect to see contracts that would in the past be issued and Cost-Reimbursement to be issued as fixed price. This will significantly increase the risk on contractors.

The second rule of concern is “Requirements for Acquisition Pursuant to Multiple-Award Contracts (interim)” – Raises the bar on competitive requirements for the issuance of such contracts.

The third is “Disclosure and Consistency of Cost Accounting Practices for Contracts Awarded to Foreign Concerns” This final rule brings the FAR into compliance with the CAS on disclosure requirements for foreign concerns that did not exist before. Foreign concerns with CAS covered contracts must now be compliant with CAS 401 and this requirement is no included in FAR 52.230-4

I have highlighted sections of the FAC that may be of interest to you

Tim

Click here for a copy of the FAC 2005-50

DFARS Case 2010-D026, Display of DoD Inspector General Fraud Hotline Posters,Proposed rule

tdiguiseppe — Fri, 11 Mar 2011 15:54:11 +0000

The DoD IG has determined that FAR 52.203-14(c), which allows an exemption from posting agency hotline posters if the contractor already has an ethics and conduct awareness program, is not sufficient to protect potential whistleblowers when alleging fraud, waste and abuse by their company.

Under this propose rule the DoD IG wants to supplement the FAR with a DFARS Clause that would make it mandatory for all DoD contractors (regardless of size or adequacy of internal ethics and conduct programs) to display the DoD IG hotline posters.

Comments on the proposed rule should be submitted in writing to the address shown below on or before May 10, 2011, to be considered in the formation of the final rule.

My guess is that regardless of any comments against this propose rule, it will be implemented, so be prepared to post the additional posters and for DCAA to ensure such posters are posted during their audits.

Click here for a link to the Federal Register