OUSD(AT&L)DPAP EVM Status and Issues Michael Pelkey OUSD(AT&L) Defense Procurement & Acquisition...
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Transcript of OUSD(AT&L)DPAP EVM Status and Issues Michael Pelkey OUSD(AT&L) Defense Procurement & Acquisition...
OUSD(AT&L)DPAPEVM Status and Issues
Michael PelkeyOUSD(AT&L) Defense Procurement & Acquisition Policy
4 February 2010
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EVM Status Update
27 Aug 09 – Dick Ginman, Dep. Dir. DPAP, designated DoD Ombudsman for EVM Issues
2 Nov 09 – DoD EVM Report transmitted to Congress
4 Jan 10 – Gary Bliss designated Director, Performance Assessments & Root Cause Analyses
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DFARS Proposed Rule
Business Systems-Definition and Administration(DFARS Case 2009-D038)
» Applies to any contract, of any type, with a requirement to maintain an approved system for Subcontracts, Government Property, Cost Estimating, EVM, MMAS, or Accounting system.
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Background
Aug 09 - Commission on Wartime Contracting (CWC) hearing on the adequacy of contractor business systems
Sep 09 – CWC published Special Report on Contractor Business Systems, “Defense agencies must improve their oversight of contractor business systems to reduce waste, fraud, and abuse.”
Nov 09 - CWC found that contractual mechanisms to enforce compliance with FAR and DFARS through payment withholding are inconsistent and, in some cases, completely lacking for key business systems.
15 Jan 10 – DFARS Proposed Rule published for public comment.
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Business Areas/Systems
DCAA internal control audit Business Areas Control Environment and Overall
Accounting System Controls Purchasing (subcontracting)
Controls Indirect and Other Direct Cost
Controls Compensation System Controls Billing System Controls Budget and Planning System
Controls Estimating System Controls Material Management and
Accounting System Controls Labor System Controls IT General System Controls
DCMA-administered Business Systems Accounting System Purchasing System Estimating System Material Management and
Accounting System (MMAS) Earned Value Management
System (EVMS) Property Management System
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DFARS Proposed Rule
Adopts the 6 business systems defined in the FAR/DFARS
Makes changes to EVMS clause, new or revised clauses for other business systems
New “Business Systems” clause provides for payment withholding of 10% or 5% for deficiencies in each of 6 Business systems
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EVMS clause changes
Requires ACO notification of system deficiency
Requires contractor response within 30 days of notification
If ACO determines that the EVMS contains a deficiency, the ACO will withhold payments IAW the Business Systems clause.
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Payment Withholding
Upon determination that a deficiency in a Business System exists, ACO will withhold 10% of contract payments
Upon receipt of an acceptable corrective action plan (CAP) within 45 days, ACO will reduce withholding for that Business System deficiency to 5%
If the ACO determines that the contractor fails to follow the CAP, withholding reverts back to 10%
Cumulative withholding across all Business Systems shall not exceed 50% of payments due, except where deficiencies:» Are highly likely to lead to improper contract payments
being made, or » Represent an unacceptable risk of loss to the
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