DCAA’s March 28, 2012 memorandum summarizes DCAA’s approach to the new DFARS Contractor Business Systems rules. As we discussed in our earlier entries, the DFARS regulations and clauses call for a determination of the adequacy of a contractor’s business systems—accounting, estimating, purchasing, material management—and allow a contracting officer to withhold five percent of contract payments
Final revisions to the new DFARS rules on Contractor Business Systems were published February 24, 2012. DoD’s summary of the comments on the interim rule and a list of the changes to the interim rule are available at 77 Fed. Reg. 11355 (Feb. 24, 2012) [pdf]. Here are six of the key points contractors need to know about the final rules.
Continue Reading Six things to know about the DFARS Contractor Business Systems rules
Many of the new contracting policies imposed by the National Defense Authorization Act for Fiscal Year 2012 [pdf] are geared towards increasing oversight of defense contractors and reducing the federal government’s outlay of cash. Here are a few of the highlights.
Continue Reading More contractor oversight in the 2012 National Defense Authorization Act
Congress recently passed legislation (Section 893 0f the National Defense Authorization Act of 2011) requiring the Secretary of Defense to develop a program ensuring that “contractor business systems” provide timely, reliable information for the management of Department of Defense programs. “Contractor business systems” include accounting systems, estimating systems, earned value management systems, material management and accounting systems, and property management systems.
The program required by this legislation will set requirements for contractor business systems, establish a process for reviewing contractor business systems, and provide for disapproval of any contractor business system that has a significant deficiency. If a contractor business system is disapproved, DoD will work with the contractor to develop a corrective action plan. Until the system is approved, DoD may withhold up to 10 percent of progress and other payments on cost type contracts with contractors that are covered by the Cost Accounting Standards.Continue Reading New Scrutiny for “Contractor Business Systems”