Contractors Purchasing System Review

Transcription

1 Contractors Purchasing System Review Jeffery A. White, C.P.M. February 2016

2 Our Mission Statement With constant and ever changing challenges in a procurement environment, J.A. White & Associates, Inc. wants to be your most trusted provider of federal Contracting consulting. Our goal is to empower your firm in terms of leveraging your procurement and management resources through Risk Identification, Process Change, and Training. Our innovative and tailored solutions help customers reshape the way they do business, from cutting costs and controlling processes to enhancing policy effectiveness And providing information for better decision making. We dedicate ourselves to: Commit to client service excellence Realize real and substantial cost savings to client operations Provide support in maintaining the highest level of Government compliance Value long term relationships ahead of short term revenue Proprietary 2

3 CPSR: The Customer s Review Measures how efficiently and effectively a Contractor spends Government funds and; Evaluates compliance with Government Subcontracting Policies, Regulations, and Laws. Proprietary 3

4 CPSR: The Customer s Review The CPSR ultimately provides the ACO with the insight required to determine if a Contractor s Purchasing System approval should be Granted, Withheld or Withdrawn. Proprietary 4

5 CPSR: The Customer s Review Contractor s Government Business Volume exceeds $25 Million (Excluding Competitive FFP, Competitive FFP/EPA Contracts and Commercial Item Acquisitions) Whenever an Administrative Contracting Officer or Procuring Contracting Officer specifies Proprietary 5

6 CPSR Risk Assessment Key Risk Assessment Elements are considered when ACO and CPSR teams are selecting Contractors for review including: Sales Data (Government, Commercial, by Type, etc ) Types and Complexity of Primes Major and High Visibility Programs Mergers and Acquisitions Experience and Education of Personnel Internal Audits and Compliance with Specific Clauses Procurement Volume Prior CPSR Data and Prior Recommendations Policies, Procedures and Training Business Size Proprietary 6

7 Selection for CPSR: Risk Assessment Risk Assessment data gathered January June and selections are usually made by June/July for the next fiscal year. FY 2016 Schedule has been established and many companies have been notified of their review. CPSR HQ and ACO s are playing a more active role with planning and scheduling reviews. Once selected for review, requests for reschedules are likely to be denied. Proprietary 7

8 Scope of CPSR: Past Trends and Future Possibilities Policy and Procedures: 68 Topics Processes and Practices: More focus on how the process works Enterprise System: Reviewing the actual system File Reviews: Sampling of files at all compliance levels Assessment of Management: Both Procurement and Non- Procurement Management Assessment of Procurement Personnel: Education, Skills, Knowledge, Training Proprietary 8

9 CPSR/DCMA Oversight Environment What to Expect: 2 Analyst 2 Weeks Government Kickoff and Contractor Presentation Daily Questions and Answers Daily Status Meetings Pre-Exit Meeting Exit Meeting Post CPSR (Report with Initial Determination/Final Determination) Proprietary 9

10 CPSR/DCMA Oversight Environment CPSR teams are working to standardize their processes. Numerous management, organizational, territorial, and process changes have been made by DCMA regarding CPSR function. Increased Number of CPSR's conducted in 2015 and trend continues into Large turnover among CPSR Analysts. 95% to 99% of Firms will fail initial CPSR. ACO s took a more assertive role during CPSR s and are expected to be more assertive in the future. ACO s are conducting surveillance reviews. Proprietary 10

11 CPSR/DCMA Oversight Environment As a result of CPSR-Related Contractor Business Systems Clause (DFARS ): More in-depth reviews Failed CPSR will cause 5-10% of payments to be withheld for CAS covered contracts Zero audit methodology (>160 to 200 files audited; all dollar values represented) CPSR teams use 24 major contractual factors to measure system (significant) deficiencies Close Out Process can be reviewed during CPSR Rules of engagement as to how CPSR s are administered have changed: Any inquiry can result in a finding. Buyers/SCA s are being interviewed. Contractors not provided list of recommendations at out brief; only potential findings are identified (but not in writing). Report reviewed by Board. ACO issues report via an Initial Determination Letter. Contractor has 30 days to respond if report indicates significant deficiencies were observed. ACO issues Final Determination Letter. ACO can withhold payment at this point, or after corrective action plan has been submitted. Contractor has 45 days to submit a corrective action plan to ACO if response to Initial Determination is deemed inadequate. Proprietary 11

12 CPSR/DCMA Oversight Environment CPSR's can trigger and/or influence other audits. ACO s are being challenged with the task of overseeing numerous audits and reviews. Earned Value Management System Small Business Review Material Management Accounting System Property System Estimating Systems Accounting/Billing Systems DCAA Audits Inspector General Audits Proprietary 12

13 CPSR Tips, Problem Areas and Trends Problem Areas: Decentralized Organization High Visibility Programs High Employee Turnover Projects Understaffed (bid that way and executed that way) Inadequate Procurement Administrative Lead-time PM/Requester largely controls and influences procurement process Inadequate Enterprise-wide Training Program Inadequate Policies and Procedures Non-Compliance Related to File Documentation Requirements Lack of Senior Management Commitment Failure to Implement Subcontract monitoring Proprietary 13

14 CPSR Tips, Problem Areas and Trends Trend Topics: Changes in Dollar Thresholds Letter Subcontracts Non-Competitive Procurements Cost-Type Subcontract Monitoring Price and Cost Analysis/Negotiations Extent of Competition Technical Evaluations Market Research Commerciality Reps and Certs Requisitions Combating Trafficking in Persons Counterfeit Electronic Parts Restriction of Ball and Roller Bearings (DFARS 225) Proprietary 14

15 CPSR Tips, Problem Areas and Trends Trend Topics: Make or Buy Small Business Subcontracting Plans Excessive Pass through Truthful Cost or Pricing Data Cost Accounting Standards Supply Chain Management Subcontract Management Multi-Year OY Funding and Documentation Reporting Executive Compensation on Subcontractors Extent of Training Conducted Over Last 12 Months How Can Management Improve Procurement Compliance Senior Management Support of Procurement and Subcontracts Proprietary 15

16 Pre-CPSR Data Call Data and Participation Must be Obtained from: Purchasing Subcontracts Contracts Finance/Accounting Accounts Payable Business Development Program Management Bid and Proposals Legal Security Property IT Proprietary 16

17 Assess Your Current Situation Have you resolved previous CPSR Recommendations via a fully implemented Corrective Action Plan? The CPSR Teams are required to assess your resolution of historical recommendations and findings. Any evidence of repeat recommendations will normally be viewed as a significant issue. Proprietary 17

18 Assess Your Current Situation Perform a Mock CPSR to Review the Following: Training Education Interviews File Reviews File Remediation Procedures Followed? PEOPLE PROCESS PROCEDURES TOOLS Procurement Policy Other Functions Policy Forms Enterprise System T's & C's Reps & Certs Proprietary 18

19 Develop a Comprehensive Corrective Action Plan Use the Mock CPSR as the Basis for the CAP Time Phased Properly Resourced Obtain Management Commitment Develop a Remediation Process Train, Train, Train Enterprise-wide in Nature Develop a Project Plan Reassess CAP Efforts Proprietary 19

20 Soft Elements the CPSR Relationships with: -ACO -CPSR Team Leader -DCAA -Customers Impact of Other Business System Reviews and Audits: -Property -EVMS -Accounting -Estimating System -MMAS -DCAA Audits -Investigations and Criminal Cases Negative or High Visibility Press Develop a Remediation Process Proprietary 20

21 CPSR Tips, Problem Areas and Trends CPSR Tips: Plan plenty of time to complete both the Risk Assessment and the Pre-CPSR Data Request Prepare a Kickoff Presentation Conduct Pre-CPSR Self Assessment/Mock CPSR Prepare a Corrective Action Plan Proprietary 21

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23 For Additional Information Jeffery A. White, C.P.M., President & C.E.O Garner Lane, Suite 104 Columbia, SC (803) (Office) Jeff Rankin, Vice President Operations 5335 Wisconsin Ave. N.W. Suite 440 Washington, DC (202) (office) (202) (mobile) Proprietary 23