32.006 Reduction or suspension of contract payments upon finding of fraud.
(c) The Secretary of the Army has delegated authority to the ASA(RDA) to reduce or suspend contract payments to contractors when there is substantial evidence that the contractor's request for advance, partial or progress payments is based on fraud.
The Army's remedy coordination official is the Chief, Procurement Fraud Division (PFD), OTJAG; Telephone (703) 696-1550; FAX (703) 696-1559. See 1.290(b)(11).
(b) Report suspected fraud related to advance, partial or progress payments to the local Procurement Fraud Advisor (PFA), who will coordinate the matter as prescribed in Chapter 8, AR 27-40.
(a)(i) PFA's shall report requests for the reduction or suspension of contract payments to contractors through the MACOM Procurement Fraud Irregularities Coordinator (PFIC) to the Chief, PFD. Such requests must be supported with substantial evidence of contractor wrongdoing. Substantial evidence means information sufficient to support the reasonable belief that a particular act or omission has occurred.
(ii) PFAs shall submit reports in accordance with DFARS 209.406-3. In addition, the PFA's report shall include--
(A) Any recommendation from investigating officers as to whether disclosure of the allegations of fraud to the contractor may compromise an ongoing investigation;
(B) The anticipated loss to the Government as a result of the fraud;
(C) The contractor's overall financial condition and ability to continue performance if payments are reduced or suspended;
(D) The contractor's essentiality to the national defense; and
(E) An assessment of all documentation concerning the alleged fraud, including documentation submitted by the contractor.
(b) The Chief, PFD, shall report requests for reduction or suspension of payments to a contractor to the ASA(RDA) through the addressee in 1.290(b)(1). The report shall contain a recommendation as to whether substantial evidence exists that a contractor's request for payment under a contract is based on fraud.
(c) The ASA(RDA) may reduce or suspend further payments to a contractor, provided that substantial evidence of fraud exists and the amount reduced or suspended is reasonably commensurate with the anticipated loss to the Government resulting from the fraud.
(d)(5) The ASA(RDA) shall make a decision based upon the written record and a standard of substantial evidence. The ASA(RDA)'s findings and conclusions shall be promptly provided to the contractor and the HCA for appropriate action.
(e) Agency procedures. (1) The ASA(RDA) shall notify a contractor of a proposed action under 10 U.S.C. 2307(h)(2). The notification shall include a copy of the record which formed the basis of the proposed action. If there is a reason to withhold from the contractor any portion of the record, the contractor shall be provided a redacted version of the record, adjusted for confidential and privileged information, to avoid inadvertent disclosure of such information.
(2) The contractor may submit information in rebuttal to the ASA(RDA)'s proposed action. The contractor shall have 30 workdays from receipt of notice to submit written matters in opposition to the basis of the action set forth in the notice letter.
(g) The Chief, PFD, shall provide administrative support to the ASA(RDA) and maintain files for all actions under 10 U.S.C. 2307(h)(2).
(a) The Chief, PFD, shall prepare the annual reports regarding recommendations for contractor payment reduction or suspension and forward them to the USD(A&T).
SUBPART 32.1--NON-COMMERCIAL ITEM PURCHASE FINANCING
32.108 Financial consultation.
(1)(i) The Army contract financing office is the addressee in 1.290(b)(8).
See DFARS Subpart 232.9.
SUBPART 32.4--ADVANCE PAYMENTS FOR NON-COMMERCIAL ITEMS
(e)(1) The Assistant Secretary of the Army (Financial Management) (ASA(FM)) is authorized to make advance payments and determinations pursuant to 10 U.S.C. 2307.
(2) The Office of the ASA(FM) will coordinate with the activity that provides contract financing support.
SUBPART 32.5--PROGRESS PAYMENTS BASED ON COSTS
32.501-2 Unusual progress payments.
(a)(2) Requests for approval of unusual progress payments shall include the following minimum documentation submitted by the contractor:
(A) Monthly cash flow forecasts for the period which include the additional financing.
(B) Estimated Profit and loss statements and balance sheets for the same period as the cash flow forecast.
(C) The most recent, audited financial statements.
(D) A description of significant events before or after preparation of financial statements which materially affect the financial condition of the company, the operating statement or the cash flow statement.
32.606 Debt determination and collection.
(c) Case files being transferred to the contract financing office shall be transferred as promptly as possible and normally within 15 calendar days after the end of the 30-day period following the contracting officer's demand for payment. See Chapter 15, AR 37-1. Forward these case files to the DIRECTOR, DEFENSE FINANCE AND ACCOUNTING SERVICE-COLUMBUS CENTER, ATTN: FAS-C0-FPD, P.O. BOX 182317, COLUMBUS, OHIO 43218-2317.
(i) In addition to information required by FAR 32.606, the case file shall include a copy of the demand made by the contracting officer; a statement as to whether or not the contract contains an Interest clause; and, if so, a copy of the clause or a reference to the clause number.
(ii) If the debt represents excess costs incurred in purchasing supplies or services against the account of a defaulted contractor, the case file shall include--
(A) The name and address of the replacement contractor;
(B) The disbursing office voucher number;
(C) The date paid;
(D) Bills of lading numbers, if any;
(E) The name of the carrier, when applicable; and
(F) The name and symbol number of the disbursing officer.
(iii) If the debt represents liquidated damages, the case file shall include an explanation of the basis for assessing liquidated damages.
Promptly forward information required by DFARS 232.671 to the addressee in 32.606(c). See Chapter 13, AR 37-103.
SUBPART 32.8--ASSIGNMENT OF CLAIMS
(d) An HCA or PARC may authorize exclusion of Alternate I to the clause at FAR 52.232-23 when it is in the Government's interest.
SUBPART 32.10--PERFORMANCE-BASED PAYMENTS
The PARC may approve use of performance-based payments. This authority may be delegated no lower than the Chief of the Contracting Office.