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
An interim rule published by the Department of Defense authorizes DoD contracting officers to withhold payment from contractors whose business systems they deem deficient. Issued on May 18, 2011, the rule implements Section 893 of the Ike Skelton National Defense Authorization Act of 2011, which we discuss here. It authorizes COs to withhold up to ten percent of progress payments if the CO determines that the contractor’s business systems contain significant deficiencies. The new rule applies to solicitations issued on or after May 18, 2011. COs are encouraged to amend existing solicitations with the new requirements “to the extent feasible.”
Continue Reading Withholding payment for deficiencies in contractor business systems