improving contract quality - office of the under … training...– "(3) delivery and...

Presented by: D. Bruce Propert, DPAP

Improving Contract Quality

PROCURE-TO-PAY DEFENSE PROCUREMENT AND ACQUISITION POLICY

TRAINING SYMPOSIUM

May 30 – June 1, 2017 ● Hyatt Regency Orlando FL 1

PDS Validations • Data formats and required data elements • Data elements required due to other elements

– E.g. cost plus fixed fee contract must have estimated cost and fixed fee

• Validation against authoritative lists – SAM, DODAAD, etc. – Units of measure, currencies, country codes, etc.

• Clauses – Used to validate another data element, e.g. clauses allowing ceiling prices – Selected clauses that had been flagged as being of interest

• Scorecards, IG finding - 52.222-50 Combating Trafficking in Persons*, White House query - 52.232-40 Providing Accelerated Payments to Small Business Subcontractors

– Expansion to add all possible remaining clause validations being phased in starting in August.

2017 Procure-to-Pay Training Symposium 2

Q2 FY17 PDS Validations - Awards

81,071 Awards 746,907 Awards


Non-Clause Fatal Errors (non DLA) – Q2 FY17


Non-Clause Warning Errors (non DLA) – Q2 FY17


Clause Errors (non DLA) – Q2 FY17

39% Purchase

Card


Top WAWF CDR reasons

Issue % CDRs Payment Office, Admin Office Assignment* 18.5%

Clauses* 10.9% Inspection/Acceptance* 9.4% Line of Accounting 8.4% Missing Pages or Attachments 9.2% Payment Instructions* 7.0% Math Errors* 4.4% All Other 32.2%

2017 Procure-to-Pay Training Symposium 7 * Current or future PDS validations

Selected Error Details • Fatal errors

– Quantity and Unit of Measure – Pricing – Zero values – Invalid DODAAC or MAPAC – Invalid DUNS or CAGE – Missing addresses

• Warnings – SIC should not be used – Non-deliverable item with delivery information – Supply with Period of Performance – $1 unit price – Lot – Back up

• Clauses • NAICS 42, 43, 44, 45


Quantity and Unit of Measure

• Error message examples: – <UnitOfMeasure> is required when <Quantity> is provided. – For the product or services ordered on line '4001', the value 'Dollars, U.S.' is invalid for

<UnitOfMeasure>

• DFARS PGI 204.7103: Line items a "shall include a description of the item or service being procured, the associated Product or Service Code (PSC), the quantity, a unit of measure, defined acceptance and inspection locations and requirements, and the delivery schedule or performance period."

"The list of available units of measure is on the Defense Procurement and Acquisition Policy website at http://www.acq.osd.mil/dpap/pdi/eb/docs/Line_Item_UoM_List.xlsx."


http://www.acq.osd.mil/dpap/pdi/eb/docs/Line_Item_UoM_List.xlsx

Pricing

• Error message examples: – When <PricingArrangementBase> is 'Firm Fixed Price' then an iteration of

<GroupOtherAmounts/ItemOtherAmounts> or <LineItemAmounts/ItemOtherAmounts> where <AmountDescription> = 'Firm Price' is required.

– When <PricingArrangementBase> is 'Cost Plus Fixed Fee' then an iteration of <GroupOtherAmounts/ItemOtherAmounts> or <LineItemAmounts/ItemOtherAmounts> where <AmountDescription> = 'Fixed Fee' is required.

• Causes – Placeholder line items - do not use "Reserved" line items – Unpriced options – Improper pricing, e.g. FFP not to exceed


Zero values

• Error message examples: – The value '0' is not a valid entry for <UnitPrice>. It must be greater

than zero. – For the product or service ordered on line '0001' the value '0' is not a

valid entry for <Quantity>. It must be greater than zero.

• Causes – Not separately priced line items – Informational line items


Invalid DODAAC or MAPAC • Error message examples:

– The value 'B6R0TP2' is not a valid entry for <DoDAAC>. It must be 6 alphanumeric characters (0-9, A-Z). Position 1 must be 0-9, A-Z but not B-E, I, K, L, O, P, Q, T, U, or X. Positions 1 and 2 cannot be HG, SD or Z0.

– The value 'W80PUW' for <DoDAAC> must be active in the authorized DoDAAC list provided by the DAASC Inquiry System. It was deleted on '2017-01-17'. Procurement Instrument Effective Date is '2017-05-19'.

– The value 'FA6201' for <DoDAAC> must have the Procurement Authority Flag set to "Y" in the authorized DoDAAC list provided by the DAASC Inquiry System.

• Causes – Use of other codes mislabeled as DODAAC (USACE codes, CAGE, MAPAC) – Expired codes – Offices not registered to do task.


Invalid DUNS or CAGE • Error message examples:

– Generic <DunsNumber> '123456787' cannot be used when <AddressDescription> is 'Contractor'. (FAR 4.605(b)(2), PGI 204.6)

– The value '054982855' for <DunsNumber> must be in the authorized DUNS list provided by the US Federal System for Award Management (SAM).

– The value '05606' for <DataValue> is not in the Defense Logistics Agency Commercial and Government Entity (DLA CAGE) system.

• Rules – FAR 4.1802(a)(2)(2) "The contracting officer shall include the contractor’s CAGE code in the contract and in

any electronic transmissions of the contract data to other systems when it is provided in accordance with paragraph (a)(1) of this section."

– FAR 4.1803 "Contracting officers shall verify the offeror’s CAGE code by reviewing the entity’s registration in the System for Award Management (SAM). … For entities not required to be registered in SAM, the contracting officer shall validate the CAGE code using the CAGE code search feature at https://www.cage.dla.mil. "


Missing Address Codes • Error message examples:

– When <AddressDescription> = 'Acceptance Location', <Address/OrganizationID/DoDAAC> must be provided.

– When <AddressDescription> = 'Ship To', at least one of <Address/OrganizatonID/Cage>, <Address/OrganizationID/DoDAAC>, <Address/OrganizationID/DunsNumber>, <Address/OrganizationID/Duns4Number>, or <Address/OrganizationID/Mapac> must be provided.

– When <AddressDescription> = 'Contractor', <Cage> must be provided.

• DFARS PGI 204.7103(a) – "(3) Delivery and acceptance locations shall be defined using Activity Address Codes published in (1)

DoD Activity Address Directory (DODAAD), DoD 4000.25-6-M, or (2) Military Assistance Program Address Directory System (MAPAD), DoD 4000.25-8-M and available for verification at https://www.daas.dla.mil/daasinq/default.asp.

– (4) No activity shall be assigned acceptance responsibility unless that activity has acceptors registered in Wide Area WorkFlow (WAWF). Available roles for an Activity Address Code can be verified at the Active DoDAACs & Roles link on the WAWF homepage at https://wawf.eb.mil/" [future validation]


https://www.daas.dla.mil/daasinq/default.asp

https://wawf.eb.mil/

SIC should not be used

• Error message: <ReferenceDescription> "Standard Industry Classification (SIC) Code" should not be used. SIC was replaced by the North American Industry Classification System (NAICS) effective 1 Oct 2000. (Federal Register 65 FR 30836)

• SPS data maintenance is removing the values from the tables


Non-Deliverable Item with Delivery Information

• Error message examples: – When <LineItemType> is 'INFOSLIN', <ReferenceDescription> cannot be

'Product Service Code'. – <Delivery> cannot be provided when <LineItemType> is 'INFOSLIN'. – <Quantity> and <UnitOfMeasure> must be provided when either <Delivery>

or <LineItemDates> for a lease or period of performance is provided.

• Causes – For incrementally funded lines, including the estimated period of

performance for the allotted funding as the period of performance – ?


Supply with Period of Performance

• Error message: When <ProductOrService> = 'Personal Property', it cannot have <LineItemDateDescription> = 'Period of Performance'.

• Causes – Annual Software Licenses or Maintenance Agreements using product PSCs,

instead of service, e.g. PSC 5895 instead of D319. – Contracts for leases are using product PSCs instead of service, e.g. 310 instead

of W018. – Using the PSC for the item being shipped instead of the PSC for the shipping. – Using PoP when a Delivery Date should be used.


$1 unit price

• Error message examples: – The Supply line item has a unit price of $1. The Product Service Code is

'2320'. – The non-Supply line item has a unit price of $1. The Product Service

Code is 'C211'.

• Causes – Ordering limits being carried onto order – Badly structured line item requirements – Attempts to portray cost type line items as firm fixed price


Lot

• Error message: Use of "Lot" for PSC '1260' is not appropriate. A unit of measure that identifies the type of item being purchased and the corresponding quantity must be used.

• PSC 1260 Fire Control Designating and Indicating Equipment – Includes: Turret, Gun, Torpedo Mount, and Searchlight Indicating

Equipment; Target Designating Equipment; Synchro Systems.


Other Clause Requirement Details Back up


DFARS 252.203-7000 • Requirements Relating to Compensation of Former DoD

Officials • As prescribed in DFARS 203.171-4, "Use the clause at

252.203-7000, Requirements Relating to Compensation of Former DoD Officials, in ALL solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items."

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DFARS 252.203-7002

• Requirement to Inform Employees of Whistleblower Rights • As prescribed in DFARS 203.970, "Use the clause at 252.203-

7002, Requirement to Inform Employees of Whistleblower Rights, in all solicitations and contracts."


http://www.acq.osd.mil/dpap/dars/dfars/html/current/252203.htm


DFARS 252.203-7003

• As prescribed in DFARS 203.1004, "Use the clause at 252.203-7003, Agency Office of the Inspector General, in solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items, that include the FAR clause 52.203-13, Contractor Code of Business Ethics and Conduct."


http://www.acq.osd.mil/dpap/dars/dfars/html/current/252203.htm252.203-7003


DFARS 252.204-7005

• As prescribed in DFARS 204.404-70, "Use the clause at 252.204-7005, Oral Attestation of Security Responsibilities, in solicitations and contracts that include the clause at FAR 52.204-2, Security Requirements."



DFARS 252.204-7012 • As prescribed in DFARS 204.7304, "Use the clause at 252.204-7012,

Safeguarding Covered Defense Information and Cyber Incident Reporting, in all solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items, except for solicitations and contracts solely for the acquisition of COTS items."

• The purpose of the DFARS rule 204.73 and associated clause is to protect both unclassified controlled technical information provided by the government and that created by the contractor as part of their normal business.

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Clause '252.211-7003' • As prescribed in DFARS 211.274-6 (a)(1) , “Use the clause at 252.211-7003,

Item Unique Identification and Valuation, in solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items, for supplies, and for services involving the furnishing of supplies, unless the conditions in 211.274-2(b) apply.”

– 211.274-2(b)(1) Contingency operations or recovery from nuclear, chemical, or biological attack

– 211.274-2(b)(2) D&F executed by HCA (or CAE for ACAT I)

• PSC is being used to determine whether the items are supplies

DFARS 252.216-7006

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• DFARS Ordering clause provides for issuance of orders electronically via posting to EDA

• As prescribed in 216.506(a), "insert the clause at 252.216-7006, Ordering, in lieu of the clause at FAR 52.216- 18, Ordering, in solicitations and contracts when a definite-quantity contract, a requirements contract, or an indefinite-quantity contract is contemplated."

Combating Trafficking in Persons Clauses

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• 52.222-50 - Combating Trafficking in Persons is to be used in all solicitations and contracts.

• It is bundled within clause 52.212-5 - Contract Terms and Conditions Required to Implement Statutes or Executive Orders—Commercial Items and also in 52.213-4 Terms and Conditions—Simplified Acquisitions (Other Than Commercial Items). Therefore, as long as one of the three clauses exist based on the purchase, the clause requirement has been fulfilled.

FAR 52.223-18

• FAR 52.223-18 - Encouraging Contractor Policies to Ban Text Messaging While Driving, is to be used in all solicitations and contracts.

• However, it is actually bundled within clause 52.212-5 - Contract Terms and Conditions Required to Implement Statutes or Executive Orders—Commercial Items. Therefore, as long as either clause exists based on the purchase, the clause requirement has been fulfilled.


DFARS 252.225-7048

• As prescribed in DFARS 225.7901-4, use clause 252.225-7048, Export-Controlled Items, on all solicitations and contracts.


FAR 52.232-40

• As prescribed in 32.009-2, "Insert the clause at 52.232-40, Providing Accelerated Payments to Small Business Subcontractors, in all solicitations and contracts."

• It is bundled within clause 52.212-5 - Contract Terms and Conditions Required to Implement Statutes or Executive Orders—Commercial Items and also in 52.213-4 Terms and Conditions—Simplified Acquisitions (Other Than Commercial Items). Therefore, as long as one of the three clauses exist based on the purchase, the clause requirement has been fulfilled. 2017 Procure-to-Pay Training Symposium 31

http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfars/far/52_232.htm#P1133_205570

DFARS 252.232-7003 • Per DFARS 232.7004 - Except as provided in 232.7002(a), use the

clause at 252.232-7003, Electronic Submission of Payment Requests and Receiving Reports, in solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items.

• Contracts paid via purchase card (Pay Office code “CRCARD”) still require this clause. There has been a common misconception that these are excluded. The text of the clause limits its applicability to submission of the receiving report, which is required to document delivery for audit.

32

DFARS 252.241-7001

• As prescribed in DFARS 241.501-70(b), "use the clause 252.241-7001 Government Access, in solicitations and contracts that include the clause FAR 52.241-5, Contractor's Facilities."


FAR 52.245-1

• As prescribed in FAR 45.107(a), insert the clause in "All cost reimbursement and time-and-material type solicitation and contracts, and labor-hour solicitations when property is expected to be furnished for the labor-hour contracts."

• A common issue seen is the use of a cost line item for travel without the use of clause 52.245-1. The clause is required if any COST type line item exists.


Government Property DFARS Clauses

• The following clauses must all exist if at least one of them exists. The multiple rules for Government Property can be found in FAR 45.107(a) and DFARS 245.107 and DFARS 211.274-6. – 52.245-1 – 252.211-7007 – 252.245-7001 – 252.245-7002 – 252.245-7003 – 252.245-7004

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NAICS 42, 43, 44, 45

• Error message: – <ReferenceValue> = '423430' is not valid when <ReferenceDescription> is

'North American Industry Classification System (NAICS)'. Must be 6 numeric digits and cannot begin with 42, 43, 44, or 45.

• In accordance with 13 CFR 121, Merchant Wholesalers and Retail Trade vendors should utilize the manufacturer NAICS and indicate that they are a non-manufacturer in SAM.

• Example: eBooks were purchased under NAICS 424920 (Book, Periodical, And Newspaper Merchant Wholesalers). – NAICS 511130 (Book Publishers) is one example of an equivalent

manufacturing NAICS. 2017 Procure-to-Pay Training Symposium 36

PROCURE PAY TO

TRAINING SYMPOSIUM

May 30 – June 1, 2017 ● Hyatt Regency Orlando FL

DEFENSE PROCUREMENT AND ACQUISITION POLICY

37

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