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DARS PART 42 -- CONTRACT ADMINISTRATION AND AUDIT SERVICES



PART 42 -- CONTRACT ADMINISTRATION AND AUDIT SERVICES

TABLE OF CONTENTS

SUBPART 42.1 — CONTRACT AUDIT SERVICES

42.1-90 Audit resolution and disposition.

SUBPART 42.15 — CONTRACTOR PERFORMANCE INFORMATION

42.1502 Policy.

42.1503 Procedures.

PART 42 -- CONTRACT ADMINISTRATION AND AUDIT SERVICES

SUBPART 42.1 — CONTRACT AUDIT SERVICES

42.1-90 Audit resolution and disposition.

(a) Policy. Contracting officers shall use contract audit advice provided by the Defense Contract

Audit Agency (DCAA) and promptly act to resolve DCAA audit recommendations. This requires --

(1) Full consideration of audit findings and recommendations;

(2) Prompt and proper resolution of differences between contracting officers and auditors on proposed disposition of audit findings and recommendations;

(3) Expeditious disposition (including fund recovery actions);

(4) Documentation of differences between audit recommendation and dispositions thereof; and

(5) Open dialogue between contracting, auditing, and audit follow-up personnel to establish and maintain an effective audit resolution system.

(b) System structure. The contract audit follow-up system shall be structured in agreement with the contracting officer’s independent decision making role and the contract auditor’s financial advisory role. Resolution of audit reports (other than pre-award) is required by law within six months of report issuance. Disposition shall take place as soon as possible after resolution.

(c) Responsibilities.

(1) The DISA Inspector General (IG) Office is the contract audit follow-up official responsible for managing DISA’s contract audit follow-up program. IG ensures that the DISA contract audit follow-up system is implemented in accordance with DoD Instruction 7640.02 and that system operation results in timely and appropriate resolution and disposition of audit reports.

(2) HCOs must ensure that:

(i) Contracting officers fully consider contract audit advice in the course of determining pre- negotiation positions.

(ii) Audit findings and recommendations are resolved and disposed of effectively and in a timely manner, while fully protecting the Government’s interest.

(iii) Up-to-date records are maintained on all applicable audit reports from receipt through disposition. For open reports, this includes written milestone plans comprised of target dates for resolution and disposition, and planned actions to accomplish those dates. When an audit is resolved, it must be supported by specific contract file documentation.

(iv) The semiannual contract audit follow-up status report submission is prepared in accordance with DoD Instruction 7640.02; Verified against prior status report submission and the applicable DCAA control logs, and submitted to PLD within 15 calendar days after the end of the 31 Mar and 30 Sep reporting periods. PLD coordinates submittal of the Agency report to the DoD Inspector General within 30 calendar days after the end of the reporting period.

(v) Adequate training is provided.

(vi) Procedures are established for documenting and reviewing:

(A) Proposed pre-negotiation objectives that provide the independent review for internal control purposes. This will be accomplished as part of the review and approval process. In documenting the pre-negotiation position, the contracting officer shall indicate whether the audit recommendations were accepted or, if not, whether the auditor revised them. When the contracting officer disagrees with the audit position, the contracting officer’s pre-negotiation documentation shall include the rationale for not accepting the audit advice. The post- negotiation documentation shall include a summary of the field pricing report recommendations and reasons for any pertinent variances from these recommendations.

(B) Objections from the contractor to the administrative contracting officer (ACO) for auditor- determined indirect cost rates. This will be accomplished as part of the business clearance review and approval process. If the contractor submits a written objection to the ACO, the ACO may communicate further with the contractor in order to reach agreement. If the ACO disagrees with the audit recommendation, the ACO shall comply with the business clearance procedures for documentation and review before disposition. If the ACO agrees with the audit recommendations, the ACO shall issue a final decision, after complying with the clearance review and approval procedures.

(vii) A copy of the post-negotiation business clearance is provided to the cognizant contract auditor so the report may be closed.

(viii) Any recovery of funds is accomplished in accordance with DoD Instruction 7640.02, FAR

32.6, and DFARS 232.6.

SUBPART 42.15 — CONTRACTOR PERFORMANCE INFORMATION

42.1502 Policy.

(a) The Contractor Performance Assessment Reporting System (CPARS) is a web-based application used for collecting, recording, and forwarding past performance information (PPI) to the Federal Past Performance Information Retrieval System (PPIRS). The CPARS provides real- time capability to record PPI for use in future source selections.

(b) When developing a method of contracting (i.e., IDIQ, BOA, BPA, CSA, etc.) for use by

DISA and other agencies, ensure the contract instructs agencies placing orders to use an approved web-based system for collecting PPI that feeds into PPIRS. The order-issuing agency is responsible for following their agency procedures to report PPI.

(c) When placing orders on another agency’s contract, follow DARS Part 42 for using, collecting, and entering PPI into CPARS.

(S-90) The DISA CPARS Agency POC is the Quality Assurance Branch (PL22) and has overall responsibility to provide the agency strategy to Senior Command Officials (SCO) and Focal Points (FP). Thereafter, FPs at the DITCO Contracting Offices is to provide training to all new users at their respective site. Upon successful completion of training and the registration of a contract by a FP, all user roles will have established accounts. CPARS is located at https://www.cpars.gov.

(S-91) DISA Contracting Officers are required to ensure that annual Contractor Performance Assessment Reports (CPARs) are prepared for a contractor’s performance when the contract value (base period and all option periods) is in accordance with the below table.

Table 42-1 CPARS Reporting Thresholds

Business Sector

Dollar Threshold5

Reviewing Official6

Systems1 (includes new development and major modifications)

>$5,000,000

One level above the PM7

Operations Support2

>$5,000,0008

One level above the AO

Services3

>$1,000,000

One level above the AO

Information Technology4

>$1,000,000

One level above the AO

Any Other Contracts

>$150,000

One level above the AO

(S-94) Frequency of CPARs. As soon as it is anticipated that the threshold will be met or exceeded (e.g., modification), initiate the CPAR process by entering the required data into CPARS. The Assessing Official (AO) establishes CPAR-reporting frequency. A CPAR MUST be completed at least every 12 months. The CPAR should be completed no later than 120 calendar days after the end of the evaluation period. The contracting officer determines if a CPAR will be completed on the basic contract vehicle or on individual task orders and will notify the AO as appropriate. Once established, the frequency should remain consistent throughout the performance of the contract.

(i) Interim Report. An interim CPAR is required for new contracts meeting the thresholds identified in Table 1 of the DoD CPARS Policy Guide that have a period of performance greater than 365 calendar days. The first interim CPAR must reflect evaluation of at least the first 180 calendar days of performance under the contract, and may include up to the first 365 calendar days of performance. For contracts with a period of performance of less than 365 calendar days, see “Final Reports” below.

(ii) Annual Interim Reports. Interim CPARs are also required every 12 months throughout the entire period of performance of the contract up to the final report. An interim CPAR is also required:

(A) Upon a significant change within the agency, provided that a minimum of six months of performance has occurred, such as the following:

(1) Change in program or project management responsibility

(2) Transfer of contract, BPA, or BOA order to a different contracting activity

(B) An interim CPAR shall be started prior to transfer of Assessing Official Representative or Assessing Official duties from one individual to another if there is six or more months performance to go prior to the next CPAR to ensure continuity.

(C) An interim CPAR is limited to contractor performance occurring after the preceding CPAR. To improve efficiency in preparing the CPAR, it is recommended that the CPAR be completed together with other reviews (e.g., award fee determinations, major program events, program milestones and quality assurance surveillance records).

(iii) Final Report. A final CPAR will be completed upon contract completion or delivery of the final major end item on contract. Final Reports are to be prepared on all contracts meeting the thresholds established in Table 1 of the DoD CPARS Policy Guide with a period of performance of less than 365 calendar days. The final CPAR does not include cumulative information but is limited to the period of contractor performance occurring after the preceding CPAR. The CPAR Focal Point has the authority to approve extensions when special circumstances arise.

(iv) Addendum Report. An addendum report is optional and is prepared for a post physical contract completion (i.e., warranty administration; contract closeout problems, conversion of a Termination for Default (T for D) to a Termination for Convenience (T for C) of the Government, or other administrative requirements such as submitting final reports, final indirect cost proposals, technical data, etc.).

(S-95) The AO should consider the below factors in deciding frequency for assessments: (i) Contract type

(ii) Period of performance

(iii) Deliverable vs. level of efforts

(iv) Milestones

(v) Risk associated with performance

(S-96) Upon completion of a CPAR, current performance assessment reports become past performance information used in source selections. A completed CPAR is automatically uploaded into PPIRS. Completion of CPARs improves the amount and quality of past performance information available to source selection teams.

42.1503 Procedures.

(a) Refer to the Introduction to CPARS Deskbook and DoD CPARS Policy Guide located at https://www.ditco.disa.mil/hq/deskbooks.asp. Past performance assessments are a combined responsibility of the AO (program office representative), Assessing Official Representatives

(AOR) (AO/AOR may be the Contracting Officer Representative (COR), or evaluator), Contracting Officer, Contract Specialist, Reviewing Official, and Contractor Representative (CR).

(b) Prepare CPARs timely to ensure the integrity of the PPI. The contracting officer and FP from the contracting office appoint AOs (PM and CORs) and the AORs to write the CPAR. If the AO/AOR is the COR, then the AO/AOR designation will be included in the COR appointment letter.

(S-90) The FP can register contracts automatically or manually. The Contract Data Entry (CDE) is an optional role. CDEs can only register contracts manually. The FP registers the AO, AOR, and CR while registering the contract for CPARS. When the CPAR record is established, all applicable users are notified via email with account information. When the CPAR is ready for contractor review, CPARS sends an email notice to the CR.

(S-91) CRs have 30 calendar days to respond to the CPAR and 7 days to request a meeting to discuss the CPAR if necessary. CRs may concur or non-concur by providing responses or additional information. If the CR does not respond within 30 days, an electronic notice is sent to the AO. The AO can then decide to grant an extension for the CR’s response or close the CPAR which is then uploaded into PPIRS. Once the CR concurs / non-concurs, the CPAR is sent back to the AO.

(S-92) If the contractor non-concurs, the AO can modify the CPARs based on clarifications received and/or send to the Reviewing Official (RO). The RO provides comments if the CPAR is contentious and has the authority to make a unilateral final decision.

(d) (1) The DISA CPARS Agency POC has access to all DISA records in CPARS. Senior Command Officials (SCO) are Contracting Branch Chiefs or Contracting Section Chiefs and only have access to CPARs assigned to their particular branch or section.

(2) Access to CPARS is restricted to authorized Government personnel and contractors registered and approved for access. Contractors cannot assume the FP, AO, AOR, or RO roles. However, contractors may assume the role of Contract Data Entry (CDE). CDE personnel register contracts only and are to work in conjunction with the FP. Contractors with government awards subject to CPARS serve as CRs and provide the contractor comments within CPARS.

(S-93) See the DoD Guide to Collection and Use of Past Performance Information (May 2003) located at http://www.cpars.gov/cparsfiles/cpars/refmatl.htm for additional guidance on protecting PPI.

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