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ACO CORB QUESTIONS AND ANSWERS
What are the responsibilities of an ACO? - Answers :The ACO is responsible to ensure the best interest of the Government is protected by ensuring the terms and conditions of the contracts are appropriate and that all parties execute the contract according to the terms and conditions of the contract. The ACO is responsible for ensuring the DCMA mission of providing Contract Administration services to DOD activities and its partners of the delivery of quality products and services to the warfighter, on time and on cost, by properly administrating FAR 42.302 and other applicable regulations and instructions. FAR 1.602- 2 - "Contracting officers are responsible for ensuring performance of all necessary actions for effective contracting, ensuring compliance with the terms of the contract, and safeguarding the interests of the United States in its contractual relationships." What is the difference between an ACO and a CA? - Answers :a. The ACO has a warrant that binds the government. The ACO decisions and documents are binding. b. The CA prepares documents up to signature but cannot bind the government. c. FAR 1.602- 1 - "(a) Contracting officers have authority to enter into, administer, or terminate contracts and make related determinations and findings. Contracting officers may bind the Government only to the extent of the authority delegated to them. Contracting officers shall receive from the appointing authority (see 1.603-1) clear instructions in writing regarding the limits of their authority. Information on the limits of the contracting officers' authority shall be readily available to the public and agency personnel." What are the characteristics of a contract line item (CLIN)? - Answers :Characteristics of CLIN are: Separately Identifiable, One fund citation, Separate Delivery Schedule, Single Unit Price. Explain what an Informational Subline Item is, and explain what a Separately Identified Subline Item is. - Answers :a. An informational subline item is used to provide information about the CLIN, like parts of a kit, but it shouldn't have a delivery information tied to it for shipment or pricing information tied to it to for payment purposes. Use Info CLINs to identify each accounting classification citation (ACRN) that is assigned to a single line item. Uses numeric suffix. b. A separately identifiable subline item (subclin) has the same characteristics of a CLIN so it would be used in situations with similar characteristics. Use Sub CLINs to establish ACRNs for severable quantities associated with a single accounting classification. It can be scheduled or priced separately. Uses alpha suffix. What are the duties of an ACO? - Answers :The duties of an ACO includes being responsible for the administration (including closeout) of various types of contracts. ACO's organize team members' work to ensure overall mission success - supporting the
warfighter. Perform administration functions such as determining eligibility and verifying evidence for contract financing such as progress payments, PBP, reviewing and making recommendations on pricing reports, reviewing and negotiating orders, monitoring contractor performance and compliance with contract (and regulations). ACO's also monitor performance and take corrective actions as necessary when problems arise regarding schedules, GFP, quality assurance, or other issues. Assure contractor compliance with CAS via reviews of disclosure statements and negotiate cost impacts of accounting system changes. Determine allowability and allocability of costs. What is the objective of proposal analysis? - Answers :To ensure the final agreed upon price is fair and reasonable. What is the difference between cost, and price analysis? - Answers :Price analysis is the process of examining and evaluating a proposed price without evaluating its separate cost elements and proposed profit. FAR 15.404-1(b)(2) Cost analysis is the review and evaluation of any of the separate cost elements and profit or fee to determine a fair and reasonable price or to determine cost realism. It is also the application of judgment to determine how well the proposed costs represent what the cost of the contract should be assuming reasonable economy and efficiency. FAR 15.404-1(c) You are assigned negotiation of an unpriced order consisting of urgently needed spare parts. After receipt of the contractor's proposal it is evident you will need more funding. You immediately call the PCO who is out of the office for two weeks. The Contracting Officer's Technical Representative tells you they talked with funding personnel, that there is plenty of funding, to proceed and negotiate with the contractor and that the PCO will provide additional funds when they return. How would you handle this? - Answers :To avoid anti-deficiency act violation ensure you get something in writing showing availability of funds. Ask the COTR for a POC in the finance office and advise that you are unable to proceed without written confirmation of funding availability. What is the relationship between the prime and subcontractor? - Answers :The prime is responsible to see that the subcontractor performs IAW with the terms and conditions of the contract. Our relationship is with the prime (privity of contract). What are the basic sections of a contract under the Uniform Contract Format (UCF)? - Answers :Part I is the "Schedule" including the following sections: A - Contract Form B - Supplies/Services with Prices/Cost/Quantities/Delivery C - Specifications/SOW/SOO/ORD D - Packaging & Marking E - Inspection & Acceptance F - Delivery or Performance G - Contract Administration Data including Line of Accounting H - Special Contract Provisions
What should be considered when determining if a Post Award Orientation Conference (PAOC) is to be held or not? - Answers :a. Nature/extent of the pre-award survey and any other prior discussions with contractor b. Type, value, and complexity of the contract c. Complexity and acquisition history of the product or service d. Requirements for spare parts and related equipment e. Urgency of the delivery schedule and relationship of the product/service to critical programs f. Length of the planned production cycle g. Extent of subcontracting h. Contractor's performance history and experience with the product or service i. Contractor's status, if any, as a small business, small disadvantaged, women-owned, veteran-owned, HUBZone, or service-disabled veteran-owned small business concern j. Contractor's performance history with small, small disadvantaged, women-owned, veteran-owned, HUBZone, and service-disabled veteran-owned small business subcontracting programs k. Safety precautions required for hazardous materials or operations l. Complex financing arrangements, such as progress payments, advance payments, or performance based payments m. Assigned contractor personnel are new to Government contracting What is a Post Award Conference and when should one be held? - Answers :A Post Award Conference aids both the Government and contractor personnel in achieving a clear and mutual understanding of all contractual requirements and helps to identify and resolve potential problems. A Post Award Conference should be held as soon as possible after contract award if the ACO deems it necessary. What is the process to close a contract? (Review Closeout Instruction - complex issue and different for FFP and Cost type contracts) - Answers :a. Review the contract and determine if it is physically complete (final acceptance document received and entered into MOCAS - quantity of items shipped equals quantity ordered or within quantity variance authorized) b. Identify and remove excess funds from FFP contracts c. Use the Contract Closeout Checklist and Contract Closeout Flowchart to ensure all closeout actions are accomplished; Items to consider/verify: d. Patents e. Property Clearance f. If contract contains a DD-254, verify completion of security actions, disposition of classified material. g. ULO h. Have audits been received for all years; have rates been determined i. Contractor submits a final voucher What is the difference in closing fixed price vs cost type contracts? - Answers :a. Time frame, Rates, Identify Quick Closeout candidates
i. Fixed priced contracts must be closed within 6 months after date of physical completion. ii. Cost type contracts must be closed within 36 months after date of physical completion. b. Cost type (and T&M) contracts require a final audit from DCAA before closing i. Audit looks for costs outside PoP and incorrect rates among other things Explain Quick Closeout and the DCMA Deviation on Quick Closeout. - Answers :a. Deviation Letter (Sep 10, 2015) authorizes ACOs to close contracts prior to establishment of indirect rates regardless of dollar value/percentage of unsettled costs provided the contractor has submitted final certified indirect cost proposal which has been audited OR a Low-Risk Memo received. Deviation expires September 30, 2017. [see restrictions in the letter] b. Quick Closeout Steps FAR 42. i. Identify quick closeout candidates that meet criteria ii. Coordinate with DCAA/CACO/DACO/Contractor/PCO iii. Obtain Information (historical rates past 3 years from contractor/DACO/DCAA) iv. Analyze Information (table to compare rates, decrement factors, alternate rate source) v. Negotiate vi. Prepare quick closeout agreement with bilateral signatures vii. Process Final Vouchers (contractor to submit within 30 days of agreement Explain allowable cost and payment and Disallowance of Cost. - Answers :Allowable cost is a cost the government will permit to be reimbursed to the contractor for performance on a contract. Disallowance of cost is the refusal of the government to recognize a cost as allowable. The ACO will issue a Notice of Intent to Disallow Cost for any cost believed to be unallowable under the contract terms or the contract cost principals in FAR 31 What must be done to close out a cost type contract that has not been audited? - Answers :Assuming that all other closeout procedures are complete: A. If final rates are available (final rate agreement in place, final voucher recieved) - the ACO can assess the risk of the contract and waive the DCAA audit if the ACO feels it is low risk. If it is not low risk, the ACO should defer closeout until DCAA has audited the contract. B. If final rates are not available, then the ACO should make an assessment if the contract is a candidate for quick closeout rates. Otherwise, the ACO will have to wait for final rates. and close once rates are established. What do you do if a contract is physically complete but does not have final rates? - Answers :a. Start the closeout checklist, notify contractor of closeout documentation required. i. In the event that the contract goes overage, enter reason code and estimated closing date
Within how many days after settlement of the final indirect cost rates for all years of performance on a physically complete contract must the contractor submit a completion invoice or voucher reflecting the settled amounts and rates? - Answers :120 days DCAA review of the Final Voucher, or _________constitute the final audit action on the contract. - Answers :Issuance of the cumulative allowable cost worksheet (CACWS) What is the purpose of the DCMA Class Deviation as it regards quick closeout? - Answers :a. Authorizes ACOs to close specific contracts prior to the establishment of final indirect rates regardless of dollar value or the percent of unsettled direct costs and indirect costs allocable to a contract. b. It allows the ACO to waive the dollar threshold established by FAR 42.708 ($1M or 10%) for quick closeout when compelling reasons exist (canceling funds/program requests to re-use money). c. ACOs shall not use deviation if significant open cost issues exist - CAS noncompliance, litigation. How would you initiate closeout for a physical complete cost reimbursable contract where DCAA has not yet audited the last incurred cost proposal? - Answers :a. The last incurred cost proposal MAY not affect the contract - it depends on the period of performance of the contract. b. DCMA INST 135 p 18 - 3.3.1.1. This would require the use of the Class Deviation authorizing ACOs to close contracts prior to the establishment of final indirect cost rates, regardless of dollar value or the percent of unsettled indirect costs allocable to the contract. The deviation can be used provided the contractor has submitted a final certified indirect cost rate proposal for the subject contract/order that has been audited by the DCAA. In selected instances, the ACO may waive the incurred cost audit requirement when compelling reasons exist (canceling funds/program office request...). The decision to waive the audit must be made by the ACO cognizant of establishing the Quick-Closeout rate agreement in consultation with DCAA. ACOs are encouraged to use this deviation to the maximum extent possible. A prime contractor uses subcontractors in the performance of a Cost Plus Fixed Fee contract. A significant delay in the contract closeout has occurred due to the non-receipt of the incurred cost audit from DCAA for the subcontractors involved. Must final rates of the subcontractor first be audited by DCAA before the prime contractor can submit a final voucher for contract closeout? - Answers :a. FAR - Quick Closeout and FAR 52.216- 7 - Allowable Cost and Payment b. The prime contract being a CPFF does not mean the sub is cost-type (keep in mind) c. Quick closeout rates may be used provided the contract has submitted a final certified indirect cost rate proposal to DCAA. d. With some exception, a contractor must have audited rates by DCAA before the prime contractor can submit a final voucher, per FAR 52.216-7. An example of an exception to this rule is using a quick close-out agreement. e. The cognizant ACO of the subcontractor would have to negotiate the quick closeout rates
In Jan 2012, 2011 rates were settled. Now it is Jan 2013 and KTR has not yet submitted finals for 2011 contracts. What do you do? - Answers :A. Once final annual indirect cost rates are settled, contractor must submit final invoice or voucher within 120 days - unless an extension has been approved by contracting officer in writing. Extenuating circumstances from FAR 42.705(b) - subs, claims, gov property... B. If the contractor fails to submit a completion invoice or voucher within the specified time period, the contracting officer may determine the amounts due to the contractor under the contract. This is determined via unilateral mod (FAR 42.705) and must be in accordance with FAR 33.211. What is the difference between Finance Payments and Invoice Payments? - Answers :a. A Finance Payment is a disbursement of monies to a contractor prior to acceptance of supplies or services by the Government. b. An Invoice Payment is a disbursement of monies to a contractor for supplies or services that have been accepted by the Government and is subject to the Prompt Payment Act. What are the different types of financing payments and on what type of contract may they be used? - Answers :a. Advance Payments: May be used on any type of contract but must be authorized by PCO and used sparingly b. Performance Based Payments: Use on Fixed Price contracts only; never on cost contracts c. Progress Payments: May be used on Fixed Price line items; Payments are made on the basis of either a percentage of completion of work (FAR 32.101, 102) or the incurrence of costs. DFARS 232.102 limits progress payments based on completion of work within DoD to construction, shipbuilding, and ship conversion/alteration/repair. d. Loan Guarantees: Made by Federal Reserve banks, on behalf of designated guaranteeing agencies, to enable contractors to obtain financing from private sources. Are performance based payments allowed for UCAs? - Answers :a. Yes they are, but progress payments are preferred b. The first few months of a contract typically do no provide objectively measurable PBP events c. PBP milestones can also be negotiated at definitization. Who can authorize the use of Advanced Payments? - Answers :The PCO What business system must be approved in order to use progress payments? - Answers :a. Accounting; but if the contractor's accounting system and controls are not fully adequate but portions of costs are adequate and clearly traceable, the ACO may approve progress payments limited to those costs in coordination with the auditor. What type of contract or line item must be present to use progress payments? - Answers :FFP
What percentage can the contract bill up to on each PBP request prior to final acceptance of all the PBP scheduled milestones? - Answers :90% is the max Name 4 criteria that are NOT suitable for PBP's. - Answers :a. The signing of the contract or contract modifications b. The exercise of contract options c. The passage of time d. Attendance at meetings, conferences, or seminars e. The expenditure of funds f. A surrogate for incurred costs g. Delivery of material, supplies, or services via DD Form 250, Material Inspection and Receiving Report h. Payment for cost-reimbursement line items i. Payment for accepted goods or services j. Payment for partial deliveries k. An incentive arrangement l. Equal payment for each event/performance criteria What are the characteristics of a contract with Performance Based Payments? - Answers :Performance Based payments are based on objective performance measures, the accomplishment of specified activities (milestones), or other quantifiable measures of results. How often can PBP requests for payment be submitted? - Answers :Not more frequently than monthly. However, multiple events/milestones may be on one monthly PBP payment request. Do performance based payments require an approved accounting system? - Answers :No, but progress payments do What is an assignment of claims? FAR 32.805(d) - Answers :It permits contractors to assign its rights to be paid amounts due or to become due as a result of contract performance to a third party, provided that the third party is a bank, trust company, or other financing institution, including any Federal lending agency. What is difference between a voucher and an invoice? - Answers :Generally, a voucher refers to a request for payment from contractor on a cost-reimbursable type contract. An invoice refers to request for payment from contractor on a fixed price type contract. Cost vouchers are processed in WAWF through DCAA auditor (interim vouchers) or the ACO (final vouchers). Invoices are processed through DFAS and are paid upon verification and receipt of acceptance documentation. What are Cost Accounting Standards? - Answers :These are a set of 19 standards and rules imposed by US Government to 1) achieve uniformity and consistency in the cost accounting principles for DoD contractors and 2) to require contractors to disclose their cost accounting practices in writing. CAS applies primarily to larger contractors.
What is a Disclosure Statement and how is it used? - Answers :A Disclosure Statement is a written description of a contractor's cost accounting practices and procedures. In general, must be submitted by any company receiving a CAS covered contract or subcontracts totaling more than $50 million in a cost accounting period. Disclosure Statements are reviewed for adequacy by the cognizant auditor and the ACO. Thereafter, the disclosed cost accounting practices must be followed or a change to the Disclosure Statement must be requested. It helps ensure consistency in cost measurement from the first estimate through actual cost accumulating and reporting. This aids in price negotiations because it allows meaningful comparisons between estimated and actual costs and between actual costs of different periods. It's the benchmark for determining whether the contractor has consistently applied the disclosed cost accounting practices. We use it also as a starting point for audits of the cost accounting system to determine the propriety of cost allocations When is a disclosure statement required? - Answers :A Disclosure Statement is required for each business unit selected to receive a CAS-covered contract or subcontract of $50 million or more, or when the company, together with its segments, received net awards of CAS-covered contracts and subcontracts totaling $50 million or more in its most recent accounting period. What are the 2 types of CAS coverage? - Answers :a. Full; same applicability as Disclosure Statement requirements b. Modified; applies when a company receives a SINGLE CAS covered contract but less than $50M in total CAS covered contracts. What is the difference between Full and Modified CAS coverage? - Answers :a. Full coverage requires the contractor to comply with all cost accounting standards in effect on the date of contract award. This coverage is required if the contractor receives a single CAS-covered contract award of $50 million or more or receives $50 million or more in net CAS-covered contract awards in its preceding cost accounting period. b. Modified coverage only requires the contractor to comply with certain cost accounting standards such as estimating, accumulating, and reporting costs; allocating costs incurred for the same purpose; accounting for unallowable costs. Modified coverage may be applied to a covered contract of less than $50 million awarded to a Business Unit that received less than $50 million in net CAS-covered contract awards in the immediately preceding cost accounting period. However, if the business unit receives a contract for more than $50 million, that contract and all subsequent CAS-covered contracts must be subject to Full Coverage. Modified coverage also applies to contracts and subcontractor with foreign governments or their agents. A contract awarded with modified CAS coverage shall remain subject to such coverage throughout its life regardless of changes in the business unit's CAS status during subsequent cost accounting periods.
c. 3.4.5.4.3. The relationship between a cost item and a cost objective d. 3.4.5.4.4. The impact on Government funding. e. 3.4.5.4.5. The cumulative impact of individually immaterial items. f. 3.4.5.4.6. The cost of administrative processing of the price adjustment modification. g. 3.4.5.4.7. The CMO Contracts Director or CACO/DACO Group Director shall review the immateriality determination to ensure the determination is adequately supported and documented prior to issuing the determination. If a contractor fails to submit an accounting change description or a required GDM or DCI proposal within the time specified by the CFAO, what remedy does the Government have? - Answers :The CFAO can estimate the GDM of the affected CAS-covered contracts and subcontracts with the assistance of the DCAA auditor. The CFAO can also withhold an amount not to exceed 10 percent of each subsequent payment on the contractor's CAS-covered contracts up to the estimated GDM until the contractor furnishes the required information. The CFAO may also issue a final decision and unilaterally adjust the contract(s) by the estimated amount of the cost impact. A contractor elects to implement a required change to comply with a new or modified standard prior to the applicability date of the standard. What should the CFAO/ACO do?
- Answers :a. The CFAO shall administer the change as a unilateral change b. The contractor shall NOT receive an equitable adjustment that results in increased costs to the Government prior to the applicability date unless the CFAO determines the unilateral change is a desirable change. - FAR 30.603- 1 What is a desirable change? What is a unilateral change? - Answers :a. "Desirable change" means a unilateral change to a contractor's established or disclosed cost accounting practices that the CFAO finds is desirable and not detrimental to the Government and is, therefore, not subject to the no increased cost prohibition provisions of CAS-covered contracts and subcontracts affected by the change. Some factors include: i. The contractor is initiating management actions directly associated with the change that will result in cost savings for segments with CAS-covered contracts and subcontracts over a period for which forward pricing rates are developed or 5 years, whichever is shorter, and the cost savings are reflected in the forward pricing rates; and ii. Funds are available if the determination would necessitate an upward adjustment of contract cost or price. b. "Unilateral change" means a change in cost accounting practice from one compliant practice to another compliant practice that a contractor with a CAS-covered contract(s) or subcontract(s) elects to make that has not been deemed a desirable change by the CFAO and for which the Government will pay no aggregate increased costs. How long are CAFU records to be maintained for? - Answers :A minimum of 6 years and 3 months after payment of the last contract affected by the audit What is the difference between "resolving" audit in CAFU and "dispositioning" audit in CAFU? - Answers :A reportable audit is considered 'resolved' when the CO has
determined/documented an action plan for addressing the findings in a PNOM or MFR and has obtained management concurrence. 3.6. An audit is considered 'dispositioned' and closed when 1) all settlement actions relative to the costs questioned or negative findings of an audit report have taken place and are documented (i.e., COFD, modification, rate agreement), 2) the ACO completes and obtains management review and concurrence of the PNM, MFR or other document dispositioning the audit and 3) CAFU generated email is sent to DCAA with copy of documentation. What are the time standards for 'resolving' and 'dispositioning' audits? - Answers :ACO shall 'resolve' all audits within 6 months of the audit report issuance date and shall 'disposition' all audits within 12 months of the audit report issuance date. Non- Reportable Audits have no time limit to resolve but shall be dispositioned within 12 months. What are ACO responsibilities with regards to CAFU? - Answers :a. Ensure all audits are properly recorded in CAFU and that information is current, accurate, complete b. Establish and update target dates for resolving and dispositioning audits c. Resolve and disposition audits in timely manner d. Consider audit findings in developing pre and post negotiation positions e. Document actions to resolve/disposition audits f. Promptly update status of audits: assigned, planned, resolved, dispositioned, deferred, or forwarded g. Report questioned costs, sustained amounts, penalties and interest in CAFU h. Provide copy of PNM, COFD, MFR or other document to auditor What are reportable audit types? - Answers :a. Accounting and management systems audits, including estimating systems, control environment and overall accounting systems, billing systems, business systems, compensation systems, material management and accounting systems, budget and planning systems, labor systems, information technology systems, purchasing systems, and direct and indirect cost systems b. Accounting and management systems follow-up audits c. Estimating or other system deficiency reports, including real-time reports (also referred to as "flash" reports). Real-time/flash reports include labor floor checks reports and purchases existence and consumption verification reports d. Earned value management systems e. Post award audits f. CAS non-compliance reports g. CAS cost impact statements h. CAS Disclosure Statements (Initial and Revised) - officially non-reportable but DCMA treats as reportable What are non-reportable audit types? - Answers :a. Pre-award proposals or proposals for change orders/mods
What is a DCAA Form 1? When is it used? - Answers :a. DCAA Form 1 is a Notice of Cost Suspensions and Disapprovals under Cost- Reimbursement Contracts, to suspend an item of cost, either direct or indirect, which lacks adequate explanation or documentary support until the required data are received and a determination can be made as to the allowability of the item. b. There are two types of DCAA Form 1 - regular, which covers one contract; and blanket, which covers multiple contracts. c. The are two categories of Form 1 - Notice of Disapproved Costs and Notice of Suspended Costs d. Suspended - item of cost, either direct or indirect, which lacks adequate explanation or documentary support for definitive audit approval or disapproval e. Disapproved - costs claimed by contractor for which audit action has been completed, and which are not considered allowable. What are expressly unallowable costs? - Answers :Expressly unallowable costs are unallowable under any and all circumstances, no exceptions. i. Interest Expense (FAR 31.205-20) ii. Donations/Contributions (FAR 31.205-8) iii. Entertainment (FAR 31.205-14) iv. Contingencies v. Bad Debts vi. Fines and Penalties vii. Goodwill viii. Losses on contracts ix. Alcohol x. Promotions xi. Personal Use xii. Profit Distribution xiii. First Class Air Fare xiv. Legal Costs xv. Travel Costs Circumstantial Unallowable Costs - costs are either allowable or unallowable depending on the special and unique circumstances that embody numerous exceptions and special rules. The majority of cost items addressed by FAR 31.2 fall into this category. What is a mass change modification? Give an example. - Answers :A mass modification (ARZ Modification) is a modification that affects a group of contracts. The modification includes a list of all impacted contracts as an attachment. Examples include: i. Address change ii. Change in CMO iii. Novation or change of name agreement iv. MOD's at the CAGE level
What is Federal Procurement Data System (FPDS)? - Answers :FPDS is a Government-wide system that reports awards and modifications of Government contracts (summary information) and is used to provide insight to the public and the Government on how and where tax dollars are being spent. What are the reporting requirements of FPDS? FAR 4.6 - Answers :a. Definitive contracts, including purchase orders and imprest fund buys over the micro-purchase threshold awarded by a contracting officer. b. Indefinite delivery actions to include the following: i. Task and Delivery Order Contracts ii. GSA Federal supply schedules iii. Blanket Purchase Agreements iv. Basic Ordering Agreements v. Any other agreement or contract against which individual orders or purchases may be placed. What is the difference between a unilateral and bilateral mod? - Answers :a. Unilateral modification is only signed by the Contracting Officer and is generally used to make Administrative changes, issue change orders, make changes authorized by clauses other than a Change Clause, and issue Termination Notices. Unilateral mods do not affect the substantive rights of the parties. i. Examples: Changing the paying office; changing the administrative office b. Bilateral modification is signed by the contractor and the Contracting Officer and is used to make negotiated equitable adjustments resulting from the issuance of a change order, definitization of Undefinitized Contract Actions (UCA)/Letter Contracts, and reflect other agreement of the parties modifying the terms of the contract. i. Examples: definitize a letter contract, de-obligate money What is the changes clause? - Answers :a. The changes clause permits the CO to make unilateral changes, in designated areas, within the general scope of the contract. This is accomplished by issuing written change orders on an SF30 and the contractor must continue performance of the contract as changed, except that in cost reimbursement or incrementally funded contracts, the contractor is not obligated to continue performance or incur costs beyond the limits established in the Limitation of Cost or Limitation of Funds clauses. The authority to issue change orders rests with the PCO except when authority is delegated to the ACO. FAR 43. b. Examples of in-scope changes: drawings, designs or specs, method of shipment or packaging, or place of delivery What is consideration for a contract modification? - Answers :Consideration generally requires two elements: (1) something of legal value must be given and (2) that thing of value must be dealt with by the parties as the agreed-upon price or exchange for the promise - there must be a "bargained-for exchange." It is basically an exchange of value (not necessarily equal value). Consideration may take the form of a contract price adjustment or other means commensurate with the change in requirements such as expedited delivery, product quality improvements, performance improvements,
How long does the contractor have to submit their indirect cost rate proposals for a given fiscal year? - Answers :6 months after the contractor's fiscal year ends. Under what conditions, would an ACO be authorized to waive a DCAA audit of proposed final indirect rates? - Answers :a. The ACO is not aware of any factors or circumstances that place a given final indirect rate proposal at risk for containing expressly unallowable costs. 3. b. The ACO receives Memo from DCAA explaining that: i. The auditor's adequacy review did not disclose any significant audit leads. ii. The auditor's adequacy review included a mathematical verification and a determination that the contractor's proposal was certified by its top management officials that the proposal does not include unallowable costs. iii. The auditor's overall assessment of risk placed the contractor's incurred cost proposal in a low-risk sampling pool. iv. Based on the factors identified in subparagraphs 3.3.2.1. through 3.3.2.3., the proposal was not selected for audit. c. DCMA quick closeout class deviation. What are the number of months to complete final overhead rate negotiations for a major and a non-major contractor? - Answers :a. 27 months for major contractors b. 36 months for non-major contractor? What is DCAA's definition of a major contractor? - Answers :Over $100 Million of auditable dollar volume What is the difference between expiring and cancelling funds? - Answers :a. Expiring funds refer to funds on the PCO side that will no longer be available for obligation for new requirements, but are still available to pay bills - time frames are dependent on appropriation type b. Cancelling funds refer to funds that are on contract and no longer available for any purpose after their expiration date - funds are returned to the treasury. Generally speaking, how long are funds available before they cancel? - Answers : years after the date last available for obligation (current) and may no longer be paid out, even if already obligated. If all contract obligations are not paid by that date, customer must find alternate function sources, usually from current appropriations. Name 4 of the 6 options/methods to prevent cancellation of "at risk" funds. - Answers :a. Initiate a request for proper disbursement adjustments by submitting the DCMA Form 1797 when errors in accounting data are found. b. Authorize early release of fee withholds where contractors are considered to be low risk. c. Deobligate funds considered to be excess to contractual requirements with written authorization from the Procuring Contracting Officer.
d. Establish the contractor's intent to invoice for the canceling funds. Determine whether payment requests will be submitted promptly to ensure processing before the funds cancel. e. Use the Wide Area Work Flow to transmit ACO approved payment requests. f. Obtain Final Vouchers to close the contracts. What are excess funds? - Answers :a. Funds relating to a specific line item or deliverable that was not performed on the contract. These may be used by buying activities to fund other program requirements as long as funds haven't expired or canceled. Excess funds can result from: i. Contract effort/scope reduction ii. Partial termination iii. Work-in-progress unliquidated balance is negative iv. Significant cost reductions on cost-type contracts v. Final price determination vi. Unperformed work (funds for warranty repairs not used How often is ACO required to input remarks/status updates to Metric Studio Canceling Funds scorecard? - Answers :Monthly Explain the concept of canceling funds and what you would do as an ACO to manage them. - Answers :a. Funds are considered expired after they are no longer current. They remain expired for 5 years after which they are considered canceled. As an ACO, it is important to manage canceling funds because otherwise, customers are forced to use alternate sources to pay contract obligations - usually current year funds, which can affect their budgets and other programs. b. Managing canceling funds effectively begins with quality CRR to ensure that payment instructions are clear and that MOCAS reflects the contract correctly. A contract with canceling funds should have a full reconciliation completed early on in the fiscal year to make sure the disbursements align with the contract. If there are errors, this allows time to coordinate corrections with DFAS if necessary - usually through a 1797. It is also important to communicate with the contractor to establish their intent to invoice canceling funds and/or issue final vouchers. If final overhead rates are an issue, quick closeout rates are an option that allows the contractor to issue a final voucher. If all else fails, we can also ask the contractors to determine an amount that can be de-obligated for which we include a release statement in a bilateral modification. What is a Business System Analysis Summary (BSAS)? - Answers :The BSAS is provided to the ACO by the functional specialist and summarizes a contractor's business systems. It is designed to assist the cognizant ACO in identifying significant deficiencies. It does not recommend disapproval of the system. This is an internal DCMA document intended for use by Contracting Officers in making business system determinations. Not for release to contractors. What actions should a Contracting Officer take when they receive a BSAS? - Answers :The Contracting Officer shall review all findings from the functional specialist or auditor,
