Source: https://www.cao.gov/dfars/dfars-242
Timestamp: 2019-11-20 10:52:14
Document Index: 125910941

Matched Legal Cases: ['art 19', 'art 242', 'ART 242', 'ART 242', 'art 31', 'art 231']

242.302 Contract administration
242.1104 Surveillance
242.1105 Assignment of
criticality designator.
DoD requires reimbursement, at a rate set by the Under Secretary
of Defense (Comptroller/Chief Financial Officer), from non-DoD organizations,
Quality assurance, contract administration, and audit services provided
under a no-charge reciprocal agreement;
Services performed under subcontracts awarded by the Small Business
Administration under FAR Subpart 19.8; and
Quality assurance performed for the Canadian Department of National Defence and pricing services performed for Public Works and Government Services Canada (PWGSC), operating as Public Services and Procurement Canada (PSPC).
and agencies may request an exception from the reimbursement policy in
paragraph (b)(i) of this section from the Under
Secretary of Defense (Comptroller/Chief Financial Officer). A request must show that an exception is in
Departments and agencies must pay for services performed by non-DoD
activities, foreign governments, or international organizations, unless
otherwise provided by reciprocal agreements.
(S-70)(i) Foreign
governments and international organizations may request contract administration
services on their direct purchases from
Direct purchase is the purchase of defense supplies in the
United States through commercial channels for use by the
foreign government or international organization.
(iii) Other foreign governments (including Canadian government organizations other than PSPC and international organizations send their requests for contract administration services to the DoD Central Control Point (CCP) at the Headquarters, Defense Contract Management Agency, International and Federal Business Team.
Contract administration offices provide services only upon request from
the CCP. The CCP shall follow the
procedures at PGI 242.002(S-70)(iii) (DFARS/PGI view).
09, 1999)
242.2--contract administration SERVICES
242.200-70
This subpart does not address
the contract administration role of a contracting officer's representative (see
201.602).
DoD activities shall not retain any contract for administration
that requires performance of any contract administration function at or near
contractor facilities, except contracts for—
Research and development with universities;
Mapping, charting, and geodesy services;
(F) Base,
post, camp, and station purchases;
Operation or maintenance of, or installation of equipment at, radar or
communication network sites;
Installation, operation, and maintenance of space-track sensors and
Dependents Medicare program contracts;
Construction and maintenance of military and civil public works,
including harbors, docks, port facilities, military housing, development of
recreational facilities, water resources, flood control, and public utilities;
Architect-engineer services;
Airlift and sealift services (Air Mobility Command and Military Sealift
Command may perform contract administration services at contractor locations
involved solely in performance of airlift or sealift contracts);
Ballistic missile sites (contract administration offices may perform
supporting administration of these contracts at missile activation sites during
the installation, test, and checkout of the missiles and associated
Operation and maintenance of, or installation of equipment at, military
test ranges, facilities, and installations; and
Center, Defense Logistics Agency.
administration functions for base, post, camp, and station contracts on a
military installation are normally the responsibility of the installation or
tenant commander. However, the Defense
Contract Management Agency (DCMA) shall, upon request
of the military department, and subject to prior agreement, perform contract
(iii) DCMA shall provide preaward survey assistance for post,
camp, and station work performed on a military installation. The contracting office and the DCMA preaward survey monitor should jointly determine the
scope of the survey and individual responsibilities.
To avoid duplication, contracting offices shall not locate their
personnel at contractor facilities, except—
support of contracts retained for administration in accordance with paragraph
(a)(i) of this section; or
permitted under Subpart 242.74.
(e)(1)(A) In special
circumstances, a contract administration office may request support from a
component not listed in the Federal Directory of Contract Administration
Services Components (available via the Internet at https://pubapp.dcma.mil/CASD/main.jsp). An example is a situation where the contractor's
work site is on a military base and a base organization is asked to provide
support. Before
formally sending the request, coordinate with the office concerned to ensure
that resources are available for, and capable of, providing the support.
requesting support on a subcontract that includes foreign military sale (FMS)
requirements, the contract administration office shall—
(1) Mark “FMS Requirement” on the face of the
(2) For each FMS case involved, provide the FMS
case identifier, associated item quantities, DoD prime
contract number, and prime contract line/subline item
SUBPART 242.3--CONTRACT ADMINISTRATION
services performed outside the
United States should be performed in accordance with FAR 42.301
unless there are no policies and procedures covering a given situation. In this case, coordinate proposed actions
U.S. country teams or commanders of unified and
(a)(7) See 242.7502 for ACO responsibilities with
regard to receipt of an audit report identifying significant accounting system
or related internal control deficiencies.
additional contract administration functions related to IR&D/B&P
projects performed by major contractors, see 242.771-3(a).
(12) Also perform all payment administration in
accordance with any applicable payment clauses.
(13)(A) Do not
delegate the responsibility to make payments to the Defense Contract Management
Agency (DCMA).
(39) See 223.370 for contract administration
responsibilities on contracts for ammunition and explosives.
(67) Also
support program offices and buying activities in precontractual
efforts leading to a solicitation or award.
(S-70) Serve as
the single point of contact for all Single Process Initiative (SPI) Management
Council activities. The ACO shall
negotiate and execute facilitywide class
modifications and agreements for SPI processes, when authorized by the affected
(S-71) DCMA has responsibility for reviewing earned
value management system (EVMS) plans and for verifying initial and continuing
contractor compliance with DoD EVMS criteria.
The contracting officer shall not retain this function.
(S-72) Ensure implementation of the Synchronized Predeployment and Operational Tracker (SPOT) by the contractor and maintain surveillance over contractor compliance with SPOT business rules available at the website provided at PGI 207.105(b)(20)(C)(9) (DFARS/PGI view) for contracts incorporating the clause at 252.225-7040, Contractor Personnel Supporting U.S. Armed Forces Deployed Outside
the United States. See PGI 242.302(a)(S-72) (DFARS/PGI view) for guidance on assessing contractor’s
(b)(S-70) Issue, negotiate, and execute orders under
basic ordering agreements for overhaul, maintenance, and repair.
242.5--postaward orientation
Postaward conferences.
DD Form 1484, Post-Award Conference Record, may be used in conducting the
For contracts that include the clause at 252.234-7004, Cost and Software Data Reporting, postaward conferences shall include a discussion of the contractor’s standard cost and software data reporting (CSDR) process that satisfies the guidelines contained in the DoD 5000.04-M-1, CSDR Manual, and the requirements in the Government-approved CSDR plan for the contract, DD Form 2794, and related Resource Distribution Table.
242.6--corporate administrative contracting officer
(c)(2) If the agencies cannot agree, refer the
matter to the Director of Defense Procurement and Acquisition Policy and Acquisition Policy.
242.7--indirect cost rates
(1) The corporate administrative contracting
officer and individual administrative contracting officers shall jointly decide
how to conduct negotiations. Follow the
procedures at PGI 242.705-1(a)(1) (DFARS/PGI view) when negotiations
are conducted on a coordinated basis.
(2)(iii) When agreement cannot be reached with the
contractor, the auditor will issue a DCAA Form 1, Notice of Contract Costs
Suspended and/or Disapproved, in addition to the advisory report to the
and development and bid and proposal costs.
242.771-1
This section implements 10
U.S.C. 2372, Independent research and development and bid and proposal costs:
242.771-2
encouraged to engage in independent research and development and bid and
proposal (IR&D/B&P) activities of potential interest to DoD, including
activities cited in 231.205-18(c)(iii)(B).
(a) The cognizant
administrative contracting officer (ACO) or corporate ACO shall—
cost allowability of IR&D/B&P costs as set forth in 231.205-18 and FAR
31.205-18;
whether IR&D/B&P projects performed by major contractors (see 231.205-18(a))
are of potential interest to DoD; and
(3) Notify the
contractor promptly of any IR&D/B&P activities that are not of
potential interest to DoD.
(b) The Defense Contract
Management Agency or the military department responsible for performing
contract administration functions is responsible for providing the Defense
Contract Audit Agency (DCAA) with IR&D/B&P statistical information, as
necessary, to assist DCAA in the annual report required by paragraph (c) of
(c) DCAA is responsible
for submitting an annual report to the Director of Defense Procurement and Acquisition Policy and
Acquisition Policy, Office of the Under Secretary of Defense (Acquisition,
Technology, and Logistics) (OUSD(AT&L)), setting forth required statistical
information relating to the DoD-wide IR&D/B&P program.
(1) From DoD to contractors, of timely and comprehensive information
regarding planned or expected DoD future needs; and
contractors to DoD, of brief technical descriptions of
contractor IR&D projects.
242.8--disallowance of costs
after incurrence.
(a) Contracting officer receipt of vouchers. Contracting officer receipt of vouchers
is applicable only for cost-reimbursement contracts with the Canadian
Commercial Corporation. See 225.870-5(b)
for invoice procedures.
(i) The contract
auditor is the authorized representative of the contracting officer for—
Receiving vouchers from contractors electronically or by other delivery methods as directed by the terms of the contract;
Approving interim vouchers, that were selected using sampling methodologies for provisional payment and sending them to the disbursing office after a pre-payment review. Interim vouchers not selected for a pre-payment review will be considered to be provisionally approved and will be sent directly to the disbursing office. All provisionally approved interim vouchers are subject to a later audit of actual costs incurred;
Reviewing completion/final vouchers and sending them to the administrative contracting officer; and
Issuing DCAA Forms 1, Notice of Contract Costs Suspended and/or Disapproved, to deduct costs where allowability is questionable.
administrative contracting officer—
Approves all completion/final vouchers and sends them to the disbursing
issue or direct the issuance of DCAA Form 1 on any cost when there is reason to
believe it should be suspended or disallowed.
SUBPART 242.11--PRODUCTION SURVEILLANCE AND
contract administration office (CAO)—
perform production surveillance on all contractors that have Criticality
Designator A or B contracts;
(ii) Shall not
perform production surveillance on contractors that have only Criticality
Designator C contracts, unless specifically requested by the contracting
production surveillance is required, shall—
(A) Conduct a periodic risk assessment of the
contractor to determine the degree of production surveillance needed for all contracts
awarded to that contractor. The risk
assessment shall consider information provided by the contractor and the
(B) Develop a production surveillance plan based
on the risk level determined during a risk assessment;
(C) Modify the production surveillance plan to
incorporate any special surveillance requirements for individual contracts,
including any requirements identified by the contracting officer; and
(D) Monitor contract progress and identify
potential contract delinquencies in accordance with the production surveillance
plan. Contracts with Criticality
Designator C are exempt from this requirement unless specifically requested by
(1) Contracting officers
(ii) Ordinarily
assign criticality designator C to unilateral purchase orders.
(2) Only the contracting
officer shall change the assigned designator.
(a) See DoDI 5000.2, Operation of the Defense
Acquisition System, for reporting requirements for defense technology projects
and acquisition programs.
(b)(i) Within four
working days after receipt of the contractor's report, the CAO must provide the
report and any required comments to the contracting officer and, unless
otherwise specified in the contract, the inventory control manager.
contractor's report indicates that the contract is on schedule and the CAO
agrees, the CAO does not need to add further comments. In all other cases, the CAO must add comments
(b) When using the
clause at FAR 52.242-2, include the following instructions in the contract
and timing of reporting (normally five working days after each reporting
line items, exhibits, or exhibit line items requiring reports;
(with addressees/codes) where reports should be sent (always include the
contracting office and contract administration office); and
following requirements for report content—
problem, actual or potential, and its cause;
and quantities affected;
the delinquency started or will start;
Actions taken to overcome the delinquency;
Estimated recovery date; and/or
Proposed schedule revision.
242.12--novationand change-of-name agreements
The responsible contracting officer shall process
and execute novation and change-of-name agreements in
accordance with the procedures at PGI 242.1203 (DFARS/PGI view).
Agreement to recognize
a successor in interest (novation agreement).
(i) When a novation agreement is required and the transferee intends
to incur restructuring costs as defined at 231.205-70, the cognizant
contracting officer shall include the following provision as paragraph (b)(7)
of the novation agreement instead of the paragraph
(b)(7) provided in the sample format at FAR 42.1204(i):
“(7)(i) Except as set forth in subparagraph (7)(ii)
below, the Transferor and the Transferee agree that the Government is not
obligated to pay or reimburse either of them for, or otherwise give effect to,
any costs, taxes, or other expenses, or any related increases, directly or
indirectly arising out of or resulting from the transfer or this Agreement,
other than those that the Government in the absence of this transfer or
Agreement would have been obligated to pay or reimburse under the terms of the
Government recognizes that restructuring by the Transferee incidental to the
acquisition/merger may be in the best interests of the Government. Restructuring costs that are allowable under
Part 31 of the Federal Acquisition Regulation (FAR) or Part 231 of the Defense
Federal Acquisition Regulation Supplement (DFARS) may be reimbursed under
flexibly-priced novated contracts, provided the
Transferee demonstrates that the restructuring will reduce overall costs to the
Department of Defense (DoD) (and to the National Aeronautics and Space
Administration (NASA), where there is a mix of DoD and NASA contracts), and the
requirements included in DFARS 231.205-70 are met. Restructuring costs shall not be allowed on novated contracts unless there is an audit of the
restructuring proposal; a determination by the contracting officer of overall
reduced costs to DoD/NASA; and an Advance Agreement setting forth a cumulative
cost ceiling for restructuring projects and the period to which such costs
shall be assigned.”
242.14--traffic and transportation management
242.15—CONTRACTOR PERFORMANCE INFORMATION
Determination to withhold payments.
If the contracting officer makes a final determination to disapprove a contractor’s business system in accordance with the clause at 252.242-7005, Contractor Business Systems, the contracting officer shall—
Monitoring contractor’s corrective action.
The contracting officer, in consultation with the auditor or functional specialist, shall monitor the contractor's progress in correcting the deficiencies. The contracting officer shall notify the contractor of any decision to decrease or increase the amount of payment withholding in accordance with the clause at 252.242-7005, Contractor Business Systems.
If the contractor notifies the contracting officer that the contractor has corrected the significant deficiencies, the contracting officer shall request the auditor or functional specialist to review the correction to verify that the deficiencies have been corrected. If, after receipt of verification, the contracting officer determines that the contractor has corrected all significant deficiencies as directed by the contracting officer’s final determination, the contracting officer shall discontinue the withholding of payments, release any payments previously withheld, and approve the system, unless other significant deficiencies remain.
(2) Prior to the receipt of verification, the contracting officer may discontinue withholding payments pending receipt of verification, and release any payments previously withheld, if the contractor submits evidence that the significant deficiencies have been corrected, and the contracting officer, in consultation with the auditor or functional specialist, determines that there is a reasonable expectation that the corrective actions have been implemented and are expected to correct the significant
For sample formats for written notifications of contracting officer determinations to initiate payment withholding, reduce payment withholding, and discontinue payment withholding in accordance with the clause at DFARS 252.242-7005, Contractor Business Systems, see PGI 242.7000 (DFARS/PGI view).
Use the clause at 252.242-7005, Contractor Business Systems, in solicitations and contracts (other than in contracts with educational institutions, Federally Funded Research and Development Centers (FFRDCs), or University Associated Research
The resulting contract will be a covered contract as defined in 242.7000(a); and
The solicitation or contract includes any of the following clauses:
242.71--voluntary refunds
A voluntary refund is a payment or credit
(adjustment under one or more contracts or subcontracts) to the Government from
a contractor or subcontractor that is not required by any contractual or other
legal obligation. Follow the procedures
at PGI 242.7100 (DFARS/PGI view) for voluntary refunds.
242.72--contractor material management and accounting system
(a) This subpart provides policies, procedures,
and standards for use in the evaluation of a contractor's material management and
accounting system (MMAS).
(b) The policies, procedures, and standards in
(1) Apply only when the contractor has contracts
exceeding the simplified acquisition threshold that are not for the acquisition
of commercial items and are either--
Fixed-price contracts with progress payments made on the basis of costs
incurred by the contractor as work progresses under the contract; and
(2) Do not apply to small businesses,
educational institutions, or nonprofit organizations.
(a) DoD policy is for its contractors to have an MMAS that conforms to the standards in paragraph (d) of the clause at
252.242-7004, Material Management and Accounting System, so that the system—
(1) Reasonably
forecasts material requirements;
(2) Ensures the costs of purchased and
fabricated material charged or allocated to a contract are based on valid
time-phased requirements; and
(3) Maintains a consistent, equitable, and
unbiased logic for costing of material transactions.
(1) A contractor has $40 million of qualifying
sales to the Government during the contractor's preceding fiscal year; and
(2) The administrative contracting officer
(ACO), with advice from the auditor, determines an MMAS review is needed based
on a risk assessment of the contractor's past experience and current
sales. Qualifying sales are sales for which certified cost or pricing
Request the contractor to respond, in writing, to the initial determination within 30 days; and
Promptly evaluate the contractor's response to the initial determination in consultation with the auditor or functional specialist, and make a final determination.
The contractor's MMAS is acceptable and approved, and no deficiencies remain, or
Request that the contractor, within 45 days of receipt of the final determination, either correct the deficiencies or submit an acceptable corrective action plan showing milestones and actions to eliminate the deficiencies;
Disapprove the system in accordance with the clause at 252.242-7004, Material Management and Accounting System; and
Withhold payments in accordance with the clause at 252.242-7005, Contractor Business Systems, if the clause is included in the contract.
Use the clause at 252.242-7004, Material Management and
Accounting System, in all solicitations and contracts exceeding the simplified
acquisition threshold that are not for the acquisition of commercial items and—
Are not awarded to small businesses, educational institutions, or
(2) Fixed-price contracts with progress payments made on the basis of
costs incurred by the contractor as work progresses under the contract.
242.73--contractor insurance/pension review
(a) The administrative contracting officer (ACO)
is responsible for determining the allowability of insurance/pension costs in
Government contracts and for determining the need for a Contractor/Insurance
Pension Review (CIPR). Defense Contract
Management Agency (DCMA) insurance/pension specialists and Defense Contract
Audit Agency (DCAA) auditors assist ACOs in making these determinations, conduct
CIPRs when needed, and perform other routine audits as authorized under FAR
42.705 and 52.215-2. A CIPR is a
DCMA/DCAA joint review that—
(1) Provides an in-depth evaluation of a
contractor's—
(iv) Related policies, procedures, practices, and
(2) Concentrates on specific areas of the
contractor’s insurance programs, pension plans, or other deferred compensation
Follow the procedures at PGI 242.7303 (DFARS/PGI view) when
conducting a CIPR.
242.74--technical representation at contractor facilities
(a) Program managers may conclude that they need
technical representation in contractor facilities to perform non-contract
administration service (CAS) technical duties and to provide liaison, guidance,
and assistance on systems and programs.
In these cases, the program manager may assign technical representatives
under the procedures in 242.7401.
(b) A technical representative is a representative
of a DoD program, project, or system office performing
non-CAS technical duties at or near a contractor facility. A technical representative is not—
representative of a contract administration or contract audit component; or
(2) A contracting officer's representative (see
When the program, project, or system manager
determines that a technical representative is required, follow the procedures
at PGI 242.7401 (DFARS/PGI view).
deficiency impacts the negotiations. See PGI 242.7502(g)(2) (DFARS/PGI view). If it does not, the