|Go to DFARS Change Notices, to view the details of the changes to this subpart.|
SUBPART 242.72--CONTRACTOR MATERIAL
MANAGEMENT AND ACCOUNTING SYSTEM
(Revised December 13, 2000)
242.7200 Scope of subpart.
(b) The policies, procedures, and standards in this subpart--
(ii) Fixed-price contracts with progress payments made on the basis of costs incurred by the contractor as work progresses under the contract; and
DoD policy is for its contractors to have an MMAS that conforms to the standards in paragraph (e) of the clause at 252.242-7004, so that the system--
(b) Ensures the costs of purchased and fabricated material charged or allocated to a contract are based on valid time-phased requirements; and
(c) Maintains a consistent, equitable, and unbiased logic for costing of material transactions.
(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 vulnerability.
(c) System evaluation. Cognizant contract administration and audit activities must jointly establish and manage programs for evaluating the MMAS systems of contractors and must annually establish a schedule of contractors to be reviewed. In addition, they must--
(B) Ensures that the team includes appropriate functional specialists (e.g., industrial specialist, engineer, property administrator, auditor).
(B) Makes every effort to resolve differences regarding questions of fact during the review.
(B) Issues an audit report for incorporation into the MMAS report based on an analysis of the contractor's books, accounting records, and other related data.
(3) Prepare the MMAS report.
(ii) If there are any deficiencies, the ACO must request the contractor to provide a written response within 30 days (or such other date as may be mutually agreed to by the ACO and the contractor) from the date of initial notification.
(iii) If the contractor agrees with the report, the contractor has 60 days (or such other date as may be mutually agreed to by the ACO and the contractor) to correct any identified deficiencies or submit a corrective action plan showing milestones and actions to eliminate the deficiencies.
(iv) If the contractor disagrees with the report, the contractor must provide rationale in the written response.
(ii) The deficiencies are significant enough to result in the reduction of progress payments or disallowance of costs on vouchers; and
(iii) Proposed corrective actions (if the contractor submitted them) are adequate to correct the deficiencies.
(B) Acceptability of the contractor's corrective action plan (if one was submitted) or the need for a corrective action plan; and
(C) Any decision to reduce progress payments or disallow costs on vouchers.
(iii) From the time the ACO determines that there are any significant MMAS deficiencies until the time the deficiencies are corrected, all field pricing reports for that contractor must contain a recommendation relating to proposed adjustments necessary to protect the Government's interests.
(iv) The ACO should consider the effect of any significant MMAS deficiencies in reviews of the contractor's estimating system (see 215.407-5).
(B) The amount of the impact is immaterial.
(iii) As the contractor implements its accepted corrective action plan, the ACO should reinstate a portion of withheld amounts commensurate with the contractor's progress in making corrections. However, the ACO must not fully reinstate withheld amounts until the contractor corrects the deficiencies, or until the impact of the deficiencies become immaterial.
(ii) Further reduce progress payments and/or disallow costs on vouchers;
(iii) Notify the contractor of the inadequacy of the contractor's cost estimating system and/or cost accounting system; and
(iv) Issue cautions to contracting activities regarding the award of future contracts.
(b) Are either-
(2) Fixed-price contracts with progress payments made on the basis of costs incurred by the contractor as work progresses under the contract.