Contract Pay (MOCAS) Operations Overview

Transcription

1 Contract Pay (MOCAS) Operations Overview Defense Finance and Accounting Service Debbie Peachey Analyst, AP MOCAS Contract Management August 23, 2017 Integrity - Service - Innovation

2 What is MOCAS? MECHANIZATION WHAT IS MOCAS? Integrated system supporting post-award administration WHO USES MOCAS? OF CONTRACT ADMINISTRATION SERVICES WHY MOCAS? Pays More Complex Contracts Pays Financing Payments High Dollar Multi-Year Contracts Progress Payments Multiple Deliverables Performance-Based Payments Foreign Currency Commercial Item Financing Foreign Military Sales Interim Cost Payments

3 MOCAS Magnitude of Operations Contract Pay - FY ,571 Active Contracts 19,552 Active Contractors 708,246 Invoices processed $152.7 Billion Disbursed Contract Pay FY 17 (YTD) 366,106 Active Contracts 19,312 Active Contractors 531,278 Invoices Processed $2.173 Trillion Obligations $118.2 Billion Disbursed MARINE CORPS 1% MARINE CORPS 1% Total Active Contracts FY17 YTD DLA 2% NAVY 36% DLA 35% AIR FORCE 13% ARMY 11% DA 4% Obligation Dollars by Service FY17 YTD DA 6% NAVY 30% ARMY 30% AIR FORCE 31% 8/23/2017 Integrity - Service - Innovation

4 MOCAS Contract Management PROBLEMS? Contract Discrepancy Report (CDR)

5 Top Contract Deficiency Reports Root Causes Line of Accounting Key data not provided Incorrect FMS Country/Case Sub-CLINS/Informational CLINS Special Payment Instructions not provided Incorrect Pay Office Assignment Note: Resolution can be delayed due to PCO/ACO failure to register in irapt.

6 PGI Special Payment Instructions The DFARS (Procedures, Guidance and Instructions (PGI) ) requires inclusion of special payment instructions in contracts that contain: multi-funded line items cost-reimbursement time-and-materials/labor-hour line items, or authorize financing payments Negotiated PGI instruction(s) should be included in Section G (Contract Administration Data) of the contract Contract level and CLIN level payment instructions prohibited on the same contract DFAR prohibits retroactive changes

7 Special Payment Instructions

8 MOCAS Entitlement Overview Erica Mauter Division Chief, AP MOCAS Entitlement August 23, 2017

9 Payment Process: Invoice Entitlement Contract Invoice Acceptance Valid Payment Request Payment Initiated G-Coded Invoices Entitlement Accounts Payable Prevalidation Verify Obligations G-AREQ Invoices Disbursement MOCAS Payment F-Coded Invoices Problems? Research J-Coded Invoices Reconciliation

10 Requirements for a Proper Invoice Vendor s Name As stated on contract Registered in SAM - Taxpayer ID - Banking Info Invoice Date -Calculate discounts Government Contract Number irapt/ WAWF Shipment Number Shipping Terms (if included in Contract) Description of Goods / Services (CLIN, QTY, Unit Price) Contact Name and Phone Number, where practical Payment Terms (Including Discount, if Offered)

11 Payment Process MOCAS Generated Entitlement Data (API) Entitlement Division OK Prevalidation of Disbursements Approved Cash Management to Obligations MAAPR Material Acceptance And Accounts Payable Report (MAAPR) Reconciliation Directorate Contractor Payment Payment Notice (CPN) Summary Advice of Payment Prepared Non-API Invoice Payment Package Manual Payment Process - EAS EFT/Checks Technician Review of irapt Invoice Research Document and MAAPR Division MAAPR Disapproved

12 Contract Financing What is contract financing? Contract Financing is covered in FAR Part 32 and is defined as the Government authorized payment of funds to the contractor prior to acceptance of supplies or services by the Government. Purpose and Scope of Contract Financing The purpose of contract financing is to assist the contractor in paying costs incurred during the performance of the contract. FAR (a)(1) states that when contract financing is provided it should be provided only to the extent actually needed for prompt and efficient performance.

13 Types of Contract Financing Progress Payments Based on costs are made on the basis of costs incurred by the contractor as work progresses under the contract. FAR clause and DFARS (will not contain FMS funds) DFARS (will contain FMS funds) FAR clause 80% rate, contractor must be a large business. FAR ALT 1 clause 85% rate, contractor must be a small business. FAR ALT II clause 80% rate contractor must be a letter contract. ** Shipment number prefix PPRA or PPRB shall be paid as a Type Payment 3 and a Sub-Trans code of W (Navy 6W) LOT PROGRESS PAYMENTS Some contractors are authorized to bill on lots. These payments are marked with an alpha at the end of the shipment number (e.g. PPRA001A). These are used to differentiate different progress payment rates on the contract Lot Progress Payments must always be signed by an ACO The ACO signature is authorization to pay Lot Progress Payments Performance Based May be made either on a whole contract basis or on a deliverable item basis, unless otherwise prescribed by agency regulations. FAR clause clause This type of contract financing payments is based upon certain specified performance criterion being accomplished (e.g. milestones) versus cost accumulation which is the basis for progress payments. They are not payments for accepted items. PBPs may be based on Performance measured by objective, quantifiable methods (e.g. milestones), accomplishment of defined events, other quantifiable measure of results. PBPs shall not be used in conjunction with Progress Payments. Rates shall not exceed 90% of contract price(or 90% of deliverable price if on a line item basis, Must have an event schedule, PBPs like Progress Payments, are paid against the Work In Progress (WIP) line ** Shipment number prefix PBPA and PBPB shall be paid as Type Payment 3 and a Sub-Trans code of W (Navy 6W)

14 Types of Financing (continued) Commercial Item Financing Based on the purchase of commercial supply or services FAR Part 32.2 incorporates the provisions for commercial item financing. FAR , Terms for financing of Purchases of Commercial Item. FAR , Installment Payments for Commercial Items. FAR Invitation to Propose Financing terms. ***Shipment numbers prefix CFAA xxx - Commercial Financing Advance - US Funded CFAB xxx - Commercial Financing Advance FMS Funded CFIA xxx - Commercial Financing Interim US Funded CFIB xxx - Commercial Financing Interim FMS Funded Commercial I tem Financing requests shall be paid against the ACRNs specified by the ACO. ***Shall be paid as a Type Payment 3 and a Sub-Trans code of W

15 Types of Financing (continued) ADVANCE PAYMENTS Advance payments are made only to prime contractors under contract which contain the advance payments clause. Unlike progress or partial payments, advance payments are made prior to, in anticipation of, and for the purpose of complete performance under a contract or several contracts under a Pool Agreement. FAR The Advance Payment clause may be considered useful and appropriate for the following a. Contracts for experimental, research or development work with nonprofit educational or research institutions. b. Contracts solely for the management and operation of Government-owned plants. c. Contracts for acquisition of cost of facilities for Government ownership. d. Contracts of such a highly classified nature that the agency considers it undesirable for national security to permit assignment of claims under the contract. e. Contracts entered into with financially weak contractors whose technical ability is considered essential to the agency. *** Shall be paid as Type payment 4 with a Sub-Trans code of A Repayment a. Liquidation against payment to the contractor b. At any time, the Contractor may repay all or any part of the funds advanced c. Written request by the Contracting Officer when unliquidated advance balance exceeds contract need

16 Contract Financing Liquidation Liquidation Defined "Liquidate" means to decrease a [delivery or invoice] payment for an accepted supply item or service under a contract for the purpose of recouping financing payments previously paid to the contractor. Determining Liquidation Rates Progress Payments The contracting officer applies a liquidation rate to the contract price of contract items delivered and accepted. The ordinary method is that the liquidation rate is the same as the progress payment rate. Performance Based Payments Liquidated by deducting a percentage or a designated dollar amount from the delivery payments. The Contracting Officer must specify the liquidation rate or designated dollar amount in the contract. Commercial Item Financing Payments Liquidated by deducting a percentage or a designated dollar amount from the delivery payments. The Contracting Officer must specify the liquidation rate or designated dollar amount in the contract.

17 Contract Financing Tips for Success Cost Items Are Not Subject to Financing The value of Cost type Line Items should not be included in the Contract Value on line 5 of the Progress Payment request Contracts must state financing terms clearly Progress Payments Any Firm Fixed Price Items not subject to financing must be clearly identified in the contract. Performance Based Payments Payment of Performance Based Payments and liquidation terms are based on the Performance Based Payment schedule. Deliverable Items should be billed in full Deliverable items should be billed at the full contractual value. Liquidation will be applied when the payment is made.

18 FAR Clauses FAR FAR ALT 1 FAR ALT 2 FAR DFARS Progress Payments 80% for large business 85% for small business 80% for a Letter contract 80% large business 90% small business 95% small disadvantaged FAR , DFARS , DFARS % large business 90% small business 95% small disadvantaged The contract has FMS funds FAR Performance Based Payments. 90% unless specified in contract FAR , 30, 31 FAR ,5 Commercial Item Financing Percentage specified in contract. Installment Financing payments are not to exceed 70%

19 Top 5 Reasons for Returned Invoices Invoice Not Billed IAW Contract (E-11) Item Information/ACRN missing/incorrect. The contractor must review contractual terms and submit a corrected invoice for payment. Non-Distribution of Receiving Report (E-12) The contractor must ensure proper distribution of the DD250 is made to the CAO terminal prior to resubmitting the invoice for payment. Invoice Returned per request (E-09) Invoice returned per request from Contractor, ACO/PCO instructions and/or DCAA. Item Number Requires Verification (E-10) Review the contract to verify if billing a funded line item. Missing Documentation(E-19) The contractor must ensure required documentation such as release of withhold letters, etc. are attached in irapt.

20 Top Payment Challenges Complex contracting arrangements Example - Use of proration PGI instructions Routine modification reallocations Increased Payment Delays Increased Erroneous Payments Destination Acceptance Currently 282 overage B codes Currently 63% of overage impacts Small Businesses Common Understanding of Contract Financing Terms Canceling funds Currently $2.6B in canceling funds in MOCAS Currently 982 invoices awaiting replacement funds The FY17 processing day - Friday, September 29 th

21

22 On the Horizon 2017 NDAA Contract Closeout FYE Planning SFIS SLOA Deployment PIR PGI Revision Customer Outreach Audit

23 MOCAS Funds Requirement Travis May Division Chief, Funds Requirement August 23, /17/

24 Payment Process: Prevalidation 7 Initial Request Accounting Disbursing 8 Response 5 Day Calendar Standard 9 Disbursement Thresholds Contract Pay > FY 05: $0 Contract Pay < FY 05: $5,000 8/17/

25 Prevalidation 5 Day Calendar Standard Percent of Prevalidation Requests Approved Within 5 Day Standard Variance from within standard goal For payments made FY17 LIMESTONE CLEVELAND INDIANAPOLIS ROME WITHIN STANDARD GOAL COLUMBUS -100% -80% -60% -40% -20% 0% 20% VARIANCE FROM WITHIN STANDARD GOAL TOTAL VOLUME OF REQUESTS (INVOICES PAID ONLY) % OF REQUESTS APPROVED WITHIN 5 DAY STANDARD VARIANCE FROM WITHIN STANDARD GOAL COLUMBUS 141,765 90% -5% WITHIN STANDARD GOAL 95% ROME % 1% INDIANAPOLIS 7,215 97% 2% CLEVELAND 8,128 98% 3% LIMESTONE 2, % 5% 8/17/

26 MOCAS Reconciliation Overview Gregory Madison Analyst, AP MOCAS Reconciliation August 23, /17/

27 MOCAS Reconciliation PROCESS: Analyze transactions to identify errors based on source documents, resolve discrepancies, correct out-of-balance conditions, and match data between the entitlement system and fiscal accounting stations. SCOPE: Limited or department wide review. Data is located, substantiated and captured to produce the audit. RESEARCH: Comprises all transactions, depending on request nature and reconciliation findings. Also consider external findings including outside audit agencies (GAO, DOD-IG, DCAA) CORRECTIONS/ADJUSTMENT: As discrepancies are identified, corrective actions are determined, processed and verified. 8/17/

28 Primary Reasons for Reconciliation Request Invoice Not Billed IAW Contract Line item information/ ACRN missing or incorrect. Contractor must review contractual terms and submit invoice per terms. Input Errors Item information/ ACRN missing/ Incorrect contract input/ Contract office training issue. Contract Complexity/Changing of PGI Not paid IAW with contract PGI/Payment and MOD timing issue. Contractor should bill invoices per the contract terms. Contract Closeout Balancing of CLINS/Funds before Closeout can occur. Canceling Funds Cancelled Funds-Requires Current Year Funds 8/17/

29 MOCAS Reconciliation Priorities Workload Priority Invoices not payable due to funding or appropriation discrepancy Dispute of Bill of Collection (BOC) request from Accounts Receivable Post payment reallocations/corrections Other requests 8/17/

30 What You Can Do to Prevent Contract Reconciliation Negotiate contracts with billing/payment instructions in sync. Know and Understand your contract terms Bill IAW contract /modification terms If applicable, know and properly apply contract financing terms Use MOCAS Data Share Initiative (MDSI) to oversee contract progress Ask Questions!!! Preferably before signing contract

31 Contract Closeout Challenges Final Invoice & Release of Claims Rate Agreement not signed Pending Settlement of Subcontractor Submission of Adequate IC Proposals CACW Incurred Cost Audit Backlog Contractor DCAA DFAS DCMA Canceling Funds Reconciliation Balancing of CLINS Cancelled Funds - Requires Current Year Funds Awaiting Audit Invoice against Cancelled Funds Contracts in Litigation KTR Has Failed to Submit Final Voucher and Closing Documents KTR Filed Bankruptcy KTR No Longer in Business 8/17/

32 ACRONYMS ACO-Administrative Contracting Officer API-Automatic Payment of Invoice CAR- Contract Administrative Report CLR- Contingent Liability Record DCAA-Defense Contract Audit Agency DCMA-Defense Contract Management Agency DFARS- Defense Federal Acquisition Regulation Supplement EDA- Electronic Document Access EDI-Electronic Data Interchange EDM- Electronic Document Manager irapt-invoicing, Receipt, Acceptance and Property Transfer (formerly WAWF) MILCON- Military Construction MOCAS- Mechanization of Contract Administrative Services PCO- Procuring Contracting Officer R&D- Research and Development ULO-Unliquidated Obligation WAWF- Wide Area Work Flow (now irapt) 8/17/

33 Questions?????