Contract Closeout Update. Mr. Kenneth Saccoccia, DCAA Mr. James Russell, DCMA Ms. Pamela Franceschi, DFAS

Transcription

1 Contract Closeout Update Mr. Kenneth Saccoccia, DCAA Mr. James Russell, DCMA Ms. Pamela Franceschi, DFAS

2 Overview Contract Life Cycle Common Barriers Status of Incurred Cost Audits Agency Material Weakness Financial Impacts Closeout Initiatives 2

3 Contract Lifecycle: Procure to Pay Overview 3

4 Contract Lifecycle: Pre-Award Buying Command DFAS Requirement Solicitation Source Selection Funding Award Analyze/Audit submission and Negotiation Document Relevant Information in CBAR Provides acquisition insight on business intelligence ACO Set up LOA & Financial Record Pre-Award Accounting System Pre-Award Estimating System 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 DFAS Process Contract Modifications Reconcile Quantity before accepting final voucher Sign & Process Pay Final Voucher Reconcile and Close Accounting File Preliminary ULO Review, reconcile payment differences Final Voucher Reconcile and Close Out Contract Resolve remaining funds Accept Final Delivery Confirm all Audits are Complete and documentation is submitted Consider Quick Close Out Process Support Quick Close Out Procedures ACO Audit of Incurred Cost Provide Final CACWS or Evaluation of Final Voucher DCAA 6

7 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 7

8 Years Closed Dollars Examined (Billions) DCAA Incurred Cost Years Completed 12,000 $250 10,000 $200 8,000 6,000 4,000 $150 $100 2,000 $50 0 FY 11 FY 12 FY 13 FY 14 FY 15 $- Years Closed Dollars Examined 8

9 Contract Closeout Contract closeout backlog remains a complex issue Actions to resolve include: Increased collaboration across the Department Established Contract Closeout Center Assisted with draft legislative proposal to streamline closeout of pre-fy 2000 contracts Revised closeout material weakness goals to address those within our control Established Tri-Agency Working Group to align incurred cost audits, canceling funds, and contract closeout priorities 9

10 Agency Material Weakness Agency Material Weakness FY15: 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 Jul 15: Established FY 16 closeout goals - Cost: 4,246 / $11.5B - FFP overage: 1,156 Nov 15: MOCAS automated closeout threshold increased to $500K 10 FY 17: Baseline/Goal will be recalculated to account for new audits issued 2 nd QTR 16: Contract # reduction met; on track for others

11 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 11

12 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 12

13 Financial Impacts FY16 Q2 DOD Non-Federal Accounts Payable $19.2B MOCAS Cancelled Unliquidated Obligations Army $1.3B Air Force $1.2B Navy $887M Marine Corps $109M Defense Agencies $32M 13

14 Appropriation Life Cycle Life Cycle Current/Available Expired Cancelled Available for Obligation and Payment Available for Payment Appropriation Types Available Expired Cancellation Date Must Obtain New Funding 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 14

15 Tri-Agency Working Group Targeting FY16 & FY17 cancelling funds 15

16 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 FY16 and FY17 cancelling ULO balances in MOCAS Priority being being given to contractors (DCAA) and contracts (DCMA/DFAS) with the highest cancelling ULO $ balances Results: Reduced FY16 and FY17 cancelling ULO balance by $450M 1,302 DCAA contractor audits were matched to MOCAS FY16 cancelling ULO balances Represents 9,744 contracts for $2.2B in FY16 cancelling ULO DCAA: 1,046 audits are complete; 256 being worked DCMA: Prioritizing administrative closeout actions across impacted CMO's for closed audits DFAS: Issued FY16 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 16

17 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 17

18 Open Discussion Mr. Kenneth Saccoccia, DCAA Mr. James Russell, DCMA Ms. Pamela Franceschi, DFAS 18