FORT LEE, Va. -- Charlie E. Williams Jr., Defense Contract Management Agency Director, recently invited industry leaders to participate in a roundtable discussion on the new contractor business system policy.
In attendance were representatives from the Aerospace Industries Association, Council of Defense and Space Industry Associations, Professional Services Council, and the National Defense Industrial Association. Representatives from the Defense Contract Audit Agency also attended.
A Defense Federal Acquisition Regulation Supplement interim rule was published, May 18. The rule identifies these systems as accounting systems, earned value management systems, estimating systems, material management and accounting systems, property management systems, and purchasing systems.
The rule re-emphasizes the contracting officer’s authority and comprehensively addresses all contractor business systems under one roof. Coupled with DoD Procedures, Guidance and Information documents, the rule creates an environment for consistent enforcement. The rule will standardize oversight and allow DoD to speak to industry with one voice.
“We are prepared to execute the rule and will do it as efficiently as we know how,” said Williams.
The interim rule requires contractors to have acceptable systems as determined by the contracting officer. Ultimately, each system requires contracting officer approval. In the case of significant deficiencies cited by the DCAA auditor or functional specialist, contractors are required to submit corrective action plans. Contracting officers are required to pursue correction of deficiencies in accordance with precise timelines.
The rule provides contracting officers with the authority to withhold payments on cost reimbursement, incentive-type, time and materials, and labor-hour contracts. They also could do so on contracts that provide progress payments based on costs or on a percentage or stage of completion.
“We are treating each company equally,” said Timothy Callahan, DCMA executive director of contracts. “In the end game, we can rely on these business systems to make sure we have a good sight picture,” he added