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ThomCons

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  1. My company recently passed our first CPSR. However, during the audit, DCMA informed us that if our prime contract is issued under FAR Part 15, all required flowdown clauses are applicable to the procurement of commercial items under the contract, regardless of FAR 521.244-6 being included. This requirement has resulted in many difficulties with commercial vendors accepting all of the required government flow downs contained in our prime contracts. Their reluctance to accept these terms and conditions are causing major delays in receiving parts, thereby impacting critical program and project schedules. Our position as to why only FAR 52.244-6 needs to be flowed down in Commercial Item Procurements is defined below: FAR 52.244-6(2) states “While not required, the Contractor may flow down to subcontracts for commercial items a minimal number of additional clauses necessary to satisfy its contractual obligations”. The list that we have is not considered minimal. FAR Part 44.402(b) states “The clause at 52.244-6, Subcontracts for Commercial Items, implements the policy in paragraph (a) of this section. Notwithstanding any other clause in the prime contract, only those clauses identified in the clause at 52.244-6 are required to be in subcontracts for commercial items or commercial components.” FAR 44.402(c) states “Agencies may supplement the clause at 52.244-6 only as necessary to reflect agency unique statutes applicable to the acquisition of commercial items.” I personally have never seen this clause modified by an Agency. If it is a requirement to flow down all of the FAR Part 15 clauses in our prime contract, why does the government have clause 52.244-6? Additionally, this clause states “the contractor may flow down, it does not state we shall flow down a minimal number of additional clauses. FAR 44.403 states “The contracting officer shall insert the clause at 52.244-6, Subcontracts for Commercial Items, in solicitations and contracts other than those for commercial items. This leads us to believe that the government’s intent is not for the prime contractors to flow down all the FAR Part 15 mandatory clauses in commercial subcontracts. Our commercial vendors do not want to accept all the mandatory flow down clauses from our prime contract, as they are small and cannot afford legal counsel to review and negotiate them with us. In summary, the flow down of all of these clauses defeats the purpose of the Government purchasing commercial items. Please advise if other professionals have encountered this situation, and what steps it took to resolve the matter. DCMA has not responded to our request for assistance and relief of this requirement.
  2. Yes and Yes. We had several findings and recommendations. We busted our butts implementing all of the corrections prior to the Initial Report being issued. Accordingly, when we responded to our Initial Report, our actions were deemed adequate and was granted an approved system. We did not want to rock the boat at the time of our formal response, as we weighed the risks, and decided to further address this issue after receiving an approved system. This decision was based, in part, of our company also being assigned a new DCMA ACO whom had never dealt with a CPSR. Now that we have the approved system, we are working to get relief from this direction, not only for ourselves, but for all other companies that have forthcoming CPSRs. (NOTE: ThomCons is my former consulting business, it is not the company of which I am currently employed.)
  3. Okay, somewhere this conversation took a left turn. I want to confirm to Vern that it was not a misunderstanding on my part. This was a frank discussion between the Lead Analyst, the Analyst, my Quality Manager and myself. The DCMA Analyst were very clear that if our prime is awarded under FAR Part 15, ALL mandatory flow down clauses are required for ANY subcontract/purchase order regardless if it is commercial or non-commercial, even if FAR 52.244-6 is in the prime contract. DCMA further stated that 52.244-6 could not be IBR, but must be flowed down in full text, which is also questionable in my professional opinion. I have been in this profession for over 30 years, and I have never been told or heard of this requirement. I do believe they are wrong in their interpretation, and that maybe it is the new Appendix 19 causing DCMA some confusion.
  4. My firm does DOD and NASA work. DCMA communicated it as a finding and deficiency. We submitted the above stated language to our Lead Auditor via email, but have not received a response. We did not formally submit it in our response, as we did not want to jeopardize receiving an approved system. Now that we have the approved system, we are looking to receive relief from this requirement.
  5. We are specifically trying to clearly determine that if a 1st tier subcontractor issues a CAS covered award to a 2nd tier subcontractor, should the first tier subcontractor issue the CAS notification letter to the prime contractor's CFAO or the 1st tiers CFAO, or the 2nd tiers CFAO. Excerpt from 52.230-6: (l) For all subcontracts subject to the clauses at FAR 52.230-2, 52.230-3, 52.230-4, or 52.230-5? (1) So state in the body of the subcontract, in the letter of award, or in both (do not use self-deleting clauses); (2) Include the substance of this clause in all negotiated subcontracts; and (3) Within 30 days after award of the subcontract, submit the following information to the Contractor?s CFAO: (i) Subcontractor?s name and subcontract number. (ii) Dollar amount and date of award. (iii) Name of Contractor making the award. (m) Notify the CFAO in writing of any adjustments required to subcontracts under this contract and agree to an adjustment to this contract price or estimated cost and fee. The Contractor shall? (1) Provide this notice within 30 days after the Contractor receives the proposed subcontract adjustments; and (2) Include a proposal for adjusting the higher-tier subcontract or the contract appropriately. (n) For subcontracts containing the clause or substance of the clause at FAR 52.230-2, FAR 52.230-3, FAR 52.230-4, or FAR 52.230-5, require the subcontractor to comply with all Standards in effect on the date of award or of final agreement on price, as shown on the subcontractor?s signed Certificate of Current Cost or Pricing Data, whichever is earlier. Thanks so much for your help with this interpretation.
  6. I would like to poll the subcontractors for their dollar threshold in which written documentation of commerciality is required to be included in the subcontract/purchase order files. Although the government is only required to document this determination for acquisitions of $1M or more, it has been stated in CPSR's that DCMA will not treat subcontract files or purchase orders as commercial during an audit if the files do not contain written documentation and supporting evidence of commerciality. Please share your experiences and threshold levels for this requirement.
  7. Here 2 Help, Based on your knowledge and research provided, would you agree that there is not a subcontractual requirement to issue CAS Notification Letters for 2nd tier and under subcontractors? If the CAS Notifications were not issued, since FAR is unclear on where to issue them, could a CPSR team legitimately state this as a finding in an audit? Please advise, ThomCons
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