PART 42 -- CONTRACT ADMINISTRATION AND AUDIT SERVICES
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.
(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.
(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.
(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 under multiple-agency contracts and Orders under single-agency contracts, follow DFARS 242.1502 Policy (DEVIATION) and Guidance for the CPARS for using, collecting, and entering PPI into CPARS.
(S-90) The DISA CPARS Department POC is the Quality Assurance Branch (PL22) and has overall responsibility to provide the agency strategy to management, Agency POCs (APOCs), and Focal Points (FP). Thereafter, FPs at the DITCO Contracting Offices are 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. Contracts/orders that meet the reporting threshold should be registered in CPARS within 30 days of award. FPs shall use FPDS-NG generated numbers when registering contracts/orders.
(S-94) Frequency of CPARs. A CPAR MUST be prepared at least annually and at the time the work under a contract/order is completed. The CPAR should be completed no later than 120 calendar days after the end of the evaluation period. Based on guidance from the DISA CPARS Procedures, the contracting officer determines if a CPAR will be completed on the basic contract vehicle or on individual task orders. 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 Guidance for the CPARS 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/order, 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/order 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/order. Final Reports are to be prepared on all contracts meeting the thresholds established in Table 1 of the Guidance for the CPARS 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 should coordinate with the AO any 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) 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.
(a) Refer to the DISA CPARS Procedures, Guidance for the CPARS and User Manual for CPARS located at https://www.ditco.disa.mil/hq/deskbooks.asp. Past performance assessments are a combined responsibility of the AO (Contracting Officer), Assessing Official Representative
(AOR) (Contracting Officer Representative (COR) or program office representative), , Reviewing Official (level above the Contracting Officer), and Contractor Representative (CR).
(b) Prepare CPARs timely to ensure the integrity of the PPI. The contracting officer is the AO. The contracting officer and FP from the contracting office appoint AORs (PM and CORs) to assist the AO with writing the CPAR. If the AOR is the COR, then the AOR designation will be included in the COR appointment letter.
(S-90) The FP can register contracts automatically or manually, but the preferred method is through auto-register. 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) Contractor Comments. The CR has the option to provide comments on the evaluation, indicate if they concur or do not concur with the evaluation, sign, and then return the evaluation to the AO. The CR has a total of 60 days following the AO’s evaluation signature date to send comments. If the CR sends comments within the first 14 days following the AO’s signature date and the AO or RO closes the evaluation, the evaluation will become available in PPIRS-RC within 1 day. On day 15 following the AO’s evaluation signature date, the evaluation will become available in PPIRS-RC with or without CR comments and whether or not it has been closed by the AO or RO. If no CR comments have been sent and the evaluation has not been closed, it will be marked as “Pending” in PPIRS-RC. If the CR sends comments at any time prior to 61 days following the AO’s evaluation signature date, those comments will be reflected in PPIRS-RC within 1 day. On day 61 following the AO’s evaluation signature date, the CR will be “locked out” of the evaluation and may no longer send comments.
(S-92) Review Contractor Comments/Close. On day 61 following the AO’s evaluation signature date, the evaluation is returned to the AO and the CR may no longer send comments. If the CR either concurred with the evaluation or did not send comments, the AO may either: close the evaluation; modify and close the evaluation; send the evaluation to the RO; or modify and send the evaluation to the RO.
If the AO closes the evaluation or modifies and closes the evaluation, the evaluation will be updated in PPIRS-RC within 1 day and the “Pending” marking will be removed. If the AO sends the evaluation to the RO or modifies the evaluation and sends it to the RO, the evaluation will be updated in PPIRS-RC within 1 day and will retain the “Pending” marking. If the CR did not concur with the evaluation, the AO may either: send the evaluation to the RO; or modify and send the evaluation to the RO. In both cases, the evaluation will be updated in PPIRS-RC within 1 day and will retain the “Pending” marking. In the event that an evaluation is modified, both the AO’s original ratings and narratives and the AO’s modified ratings and narratives will remain a part of the evaluation recorded in PPIRS-RC.
(S-93) Reviewing Official Comments/Close. RO comments and signature are required whenever the CR indicates that they do not concur with the AO’s evaluation and when the AO has sent the evaluation to the RO for closure. The RO should provide comments, sign, and close the evaluation. When the evaluation is closed by the RO, it will be updated in PPIRS-RC within 1 day and the “Pending” marking will be removed. The RO also has the option to return the evaluation to the AO for additional changes if desired. In such a case, the AO should make changes as necessary, re-send the evaluation to the RO, and the RO should provide comments, sign, and close the evaluation.
(S-94) Evaluation Timeframe. The entire CPARS evaluation process must be completed within 120 days following the end of the period of performance. This timeframe includes the CR’s 60 day comment period. Agencies are required to report information into CPARS in a timely manner. If the CPARS process is not completed within 120 days, DISA will not be compliant, and this will impact our CPARS and PPIRS metrics.
(d) (1) The DISA CPARS Department POC has access to all DISA records in CPARS. Agency POCs are Contracting Branch Chiefs or Contracting Section Chiefs and only have access to CPARs assigned to their particular DITCO.
(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. Contractors with government awards subject to CPARS serve as CRs and provide the contractor comments within CPARS.
(S-95) See the DoD Guide to Collection and Use of Past Performance Information (May 2003) located at http://www.acq.osd.mil/dpap/Docs/PPI_Guide_2003_final.pdf for additional guidance on protecting PPI.
(S-96) Classified and Special Access Programs (SAPs). Classified and SAP CPARs will NOT be entered into the CPARS database. Only in the case of classified CPARs will paper copies be used to document contractor performance. Reference DISA CPARS Procedures for additional guidance.