Contract Closeout Update. Ms. Anita Bales, DCAA Mr. Timothy Callahan, DCMA Ms. Rebecca Beck, DFAS

Transcription

1 Contract Closeout Update Ms. Anita Bales, DCAA Mr. Timothy Callahan, DCMA Ms. Rebecca Beck, DFAS

2 Overview Contract Life Cycle Industry Common Barriers Glide Paths Agency Material Weakness Contract Closeout Financial Impacts Closeout Initiatives Appropriation Life Cycle Tri-Agency Working Group Department-Wide Initiatives 2

3 Contract Lifecycle: Procure to Pay Overview 3

4 Contract Lifecycle: Pre-Award Buying Command Requirement Solicitation Source Selection Document Relevant Information in CBAR Provides acquisition insight on business intelligence ACO DFAS Award Funding Analyze/Audit submission and Negotiation Forward Pricing Proposals and Rates Set up LOA & Financial Record Pre-Award Accounting DCAA 4

5 Contract Lifecycle: During Performance Buying Command Monitor Funding Accept Deliveries ACO Adjust Funding & Monitoring Process Contract Modifications Billing Rates DFAS Monitor Funding Accounting/Billing System Audit Process Withholds Maintain Gov. Financial Record Pay Vouchers Process Vouchers/ Perform Payment Reviews Annual Audit of Incurred Cost DCAA 5

6 Contract Lifecycle: Closeout Buying Command ACO Process Contract Modifications Reconcile Quantity before accepting final voucher Preliminary ULO Review, reconcile payment differences Accept Final Delivery Confirm all Audits are Complete and documentation is submitted Consider Quick Close Out Process DFAS Reconcile and Close Out Contract Resolve remaining funds Sign & Process Final Voucher Pay Final Voucher Provide Final CACWS or Evaluation of Final Voucher Audit of Incurred Cost Reconcile and Close Accounting File Support Quick Close Out Procedures DCAA 6

7 Industry Subcontract management CACW Industry s Role Yearend rate adjustments Final inventory Final voucher Timely and adequate incurred cost submissions Closing Statement 7

8 Common Barriers and Recommendations Barriers to Closeout Contractor Submission Delays Delayed Negotiation of Overhead Rates Final OH Rates Direct Cost Audits Complex Contracts Cancelled Funds Reconciliations Issues Recommendations to Mitigate Submission of Cumulative Allowable Cost Worksheet (CACWS) Timely Submission of Final Voucher Monitor Cancelled Funds Standard, Clear and Simplified Payment Instructions Limit Contract Financing Rates 8

9 DCAA Incurred Cost Years Completed 9

10 10

11 DFAS Aged Reconciliation Inventory 11

12 12

13 Agency Material Weakness Agency Material Weakness FY16: Updated material weakness criteria to address KTS in DCMA s control - 20% reduction of overage cost contracts - 20% reduction of obligated value of overage cost contracts - Defined burn down plan for firm fixed price contracts Nov 15: MOCAS automated closeout threshold increased to $500K Jul 16: Established FY 17 closeout goals - Cost: 43,075 / $144.9B - FFP overage: nd QTR 17: Working towards obligated value; Fixed Price met 13 FY 18: Baseline/Goal will be recalculated to account for new audits issued

14 Contract Closeout Contract closeout importance to audit readiness Affects Dormant funds Reduces contingent liability Other benefits Reduces liability to use current year funds Frees expired funds for use elsewhere Reduces actions to address canceling funds 14

15 Contract Closeout What we re working on.. Predictable battle rhythm Predictive capability for when audits and rates will be completed Resolution of systems issues that reopen closed contracts Prioritization of funds reconciliation actions DoD IT solution that has shared visibility and common status reporting for key players Improving final voucher timeliness 15

16 Financial Impacts FY17 Contract Pay (YTD) 371,229 Active Contracts 19,398 Active Contractors 356,423 Invoices Processed $2.177 Trillion Obligations $77.9 Billion Disbursed MOCAS Cancelled Unliquidated Obligations Air Force $1B Army $1.4B Navy $760M Marine Corps $77M Defense Agencies $53M 16

17 Appropriation Life Cycle Appropriation Life Cycle Current/Available Expired Cancelled Available for Obligation and Payment Available for Payment Must Obtain New Funding Appropriation Types Available Expired Cancellation Date O & M = 1 Year + 5 Years = September 30th of the 6th year R & D = 2 Year + 5 Years = September 30th of the 7th year PROC = 3 Year + 5 Years = September 30th of the 8th year MILCON = 5 Year + 5 Years = September 30th of the 10th year 17

18 Tri-Agency Working Group Targeting FY17 & FY18 cancelling funds 18

19 Tri-Agency Working Group Goal: Strategically align priorities across all three Agencies for contract closeout actions Aligns DCMA s closeout strategy and DCAA s audit plan with the service s financial records maintained by DFAS Focus: Targeting FY17 and FY18 cancelling ULO balances in MOCAS Priority being being given to contractors (DCAA) and contracts (DCMA/DFAS) with the highest cancelling ULO $ balances Results: Reduced FY17 and FY18 cancelling ULO balance by $820M 1,709 DCAA contractor audits were matched to MOCAS FY17 cancelling ULO balances Represents 12,964 contracts for $4.1B in FY17 cancelling ULO DCAA: 1,233 audits are complete or not required; 476 being worked DCMA: Prioritizing administrative closeout actions across impacted CMO's for closed audits DFAS: Issued FY17 year-end cancelling year invoice instructions to assist with receiving and processing cancelling year transactions prior to the funds cancelling Future: Follow the same process for future years cancelling ULO balances 19

20 Department-Wide Initiatives Contracts Prior to FY2000 No Further Deliverables Unreconcilable Legislative Relief DPAP Initiatives Data Lake Project Posting Contract Closeout Notices Increase Simplified Acquisition Threshold Simplified Payment Instructions 20

21 Open Discussion Mr. Anita Bales, DCAA Mr. Timothy Callahan, DCMA Ms. Rebecca Beck, DFAS 21