May 30, 2000
CONTRACT ADMINISTRATION AND AUDIT SERVICES
PURPOSE: To provide guidance to all NASA Centers on contract administration and audit support services provided by the Defense Contract Management Agency (DCMA) (formerly DCMC), and the Defense Contract Audit Agency (DCAA).
BACKGROUND: As a result of reviews by the NASA Inspector General of NASA's Contract Audit Follow-up System, it was concluded that additional guidance should be provided by the Office of Procurement to all NASA Procurement Offices. This guidance is being provided in order to enhance our overall compliance with the FAR Part 42, NFS Part 1842, and OMB Circular A-50 Audit Follow-up.
GUIDANCE: The following guidance and clarification are provided in order to ensure that all procurement personnel in the performance of tracking and resolving reportable contract audit reports meets the requirements of the NASA Contract Audit Follow-up System.
1. In order to ensure an understanding of what constitutes a "reportable" audit, the following definition is provided: In accordance with the DCAA Contract Audit Manual (CAM) 15-603.2, the following are considered to be reportable audits:
1. estimating systems surveys
2. accounting and related internal control system reviews
3. defective pricing reviews
4. cost accounting standards (CAS) matters
2. In order to ensure full reporting in the NASA tracking system, procurement personnel who receive a reportable audit directly from DCAA should immediately report the receipt of the audit to their Center DCAA Point of Contact, so it can be included in the NASA electronic tracking system.
3. OMB Circular A-50 requires that all audit reports be resolved within 6 months from their receipt. (Resolved means the point at which the audit organization and agency management or contracting officials agree on action to be taken on reported findings and recommendations, or, in the event of disagreement, the point at which the audit follow-up official determines the matter to be resolved.) It is essential that we make every effort to meet the 6 month requirement in order to prevent any significant backlog and in many cases to sustain questioned costs in a timely manner.
4. It is essential that Contracting Officers maintain a dialogue with DOD Administrative Contracting Officers (ACO) as required by NFS 1842.7301 in order to review and understand the status of significant audit findings on both prime contracts and subcontracts delegated to DOD. Although Contracting Officers are not directly responsible for subcontractor audit reports that are delegated to DOD ACO's, it is expected that NASA Contracting Officers when discussing their delegated contracts with the ACO's will request information on any reportable audit reports and the resolution of those reports. NASA Contracting Officer's should document their files of any action taken by the ACO or include any documentation provided by the ACO in their file. Further, in order to ensure that the ACO's are providing significant information, NASA Form 1430 (Letter of Contract Administration Delegation, General) has been revised (line 14) to require the ACO to specifically furnish to NASA detailed information on DCAA audit reports. (NOTE: The revised Form can be found on NASA's Procurement Library Homepage).
5. In order to clarify the services performed by outside agencies the following is provided:
Defense Contract Audit Agency (DCAA) performs audit services for NASA if audits are required on industry organizations. Department of Health and Human Services (DHHS) performs audit services for NASA if audits are required on universities and nonprofit organizations. Type of audit does not matter, the key is if DHHS has cognizance of the organization under OMB Circular A-133 requirements. Office of Naval Research (ONR) performs contract and grant administration services for NASA if services are required on university contracts and/or grants. Defense Contract Management Agency (DCMA) performs contract administration services for NASA if services are required on industry contracts.
EFFECTIVE DATE: This PIC is effective as dated and shall remain in effect until cancelled or superseded.
HEADQUARTERS CONTACT: Jack Horvath, Code HK, (202) 358-0456, email: firstname.lastname@example.org.
R. Scott Thompson
Director, Contract Management Division