The President signed the 2019 NDAA (National Defense Authorization Act) named for Senator John McCain today. So beginning today, we will be covering just a few of the provisions included in the legislation – those that might be of interest to Government contractors (and prospective Government contractors).
Sometimes we become very insular and begin to believe that contracting problems are limited to the United States. Probably because of the shear size of our procurement budget, no other country loses as much to fraud, waste, and abuse. But as a percentage of procurement budgets, its likely that other countries lose more that the US. There are probably cultural reasons for this but we don’t believe that many countries have the level of oversight that the US enjoys (or not enjoys, depending upon your perspective).
Richard Olsen, vice president of finance for Mission Support Alliance has agreed to pay triple the $41,480 in kickbacks he received from his own company, or $124,440.
Under the Contract Disputes Act (CDA), a contractor has 90 days to appeal a contracting officer’s final decision. The 90-day period in which to appeal a contracting officer’s decision to the Board is jurisdictional and may not be waived.
The Department of Defense prefers to buy goods and services from the commercial marketplace to take advantage of new innovations and save on acquisition costs. However, DoD’s process for determining whether an item can be purchased commercially – and at a fair and reasonable price – is often long and challenging. This was GAO’s (Government Accountability Office) conclusion in a recent report (see Improved Information Sharing Could Help DOD Determine Whether Items Are Commercial and Reasonably Priced.
FAR Part 44 lays out the case for Government reviews of contractor purchasing systems. The objective of a “Contractor Purchasing System Review” (CPSR) is to evaluate the efficiency and effectiveness with which the contractor spends Government funds and complies with Government policy when purchasing and subcontracting. CPSRs provide the contracting officer a basis for granting, withholding, or withdrawing approval of a contractor’s purchasing system.
Under the SBA’s Surety Bond Guarantee (SBG) Program, the SBA guarantees bid, payment and performance bonds for small and emerging contractors who cannot obtain surety bonds through regular commercial channels.
DCAA (Defense Contract Audit Agency) recently posted several adequacy checklists for termination settlement proposals for cost and fixed priced contracts.
In 2014, the AAFES (Army and Air Force Exchange Service) awarded a contract to Team Hall Venture to operate a frozen yogurt concession at a food court on a military base. The contract period of performance was for up to ten years. The concession opened that November but had to close from time to time due to rodent infestation and flooding. About a year and a half after opening, the concession ceased operations and the contract was terminated.
Most Government contractors with cost-type contracts have been subjected to “paid voucher” reviews. These are reviews where contract auditors (usually DCAA or Defense Contract Audit Agency) will take a voucher that has previously been paid in the last year and trace the amounts claimed, billed, and paid to source documents. This is a fairly recent program coming out of DCAA with dubious benefits. One former auditor speculated that after DCAA transitioned most of its important work to DCMA (Defense Contract Management Agency), it has been scrounging around looking for purposeful work. Whether paid voucher reviews provide a benefit to the Government or not, most of the testing steps do not require the skills of professional auditors (Certified Public Accountants). Many “testing” steps are those that anyone, with minimal training, could perform – e.g. did the contractor pay the vendor in 30 days?