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joan

DFARS Business Systems

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final rule February 2012, if I recall correctly.

ROI (Return on Investment) I performed internet search and was looking to see what "efficiencies" have resulted from this final rule.  Anyone?

thanks

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I am not aware of any findings about efficiencies or other ROI. However, you might be interested in a DODIG report, Evaluation of Defense Contract Management Agency Actions on Reported DoD Contractor Business System Deficiencies, DODIG-2016-001, Oct. 1, 2015:

Quote

Objective 

We evaluated Defense Contract Management Agency (DCMA) actions on DoD contractor business system deficiencies reported by the Defense Contract Audit Agency (DCAA). Our primary objective was to determine if DCMA complied with applicable Defense Federal Acquisition Regulation Supplement (DFARS) requirements. For example, we evaluated DCMA contracting officer actions on accounting system deficiencies for compliance with: 

  • DFARS clauses 252.242-7005, “Contractor Business Systems,” and 252.242.7006, “Accounting System Administration” and 
  • DFARS Procedures, Guidance, and Information (PGI) 242-7502, “Contractor Accounting Systems and Related Controls.” 

As part of the evaluation, we randomly selected 21 of 164 DCAA business system deficiency reports issued f rom July 2012 t hrough June 2013. See Appendix A for a discussion of our scope a nd methodology. This is the second of two reports we issued on DCMA contracting officer compliance with the DFARS requirements relative to contractor business systems. Our first report addressed an evaluation of DCMA contracting officer actions on reported DoD contractor estimating system deficiencies. This report addresses our evaluation of contracting officer actions on other contractor business systems, including accounting, billing, and material management and accounting systems.

***

Contracting Officers Did Not Comply With DFARS Requirements and DCMA Policy 

For all 21 DCAA reports we evaluated, DCMA contracting officers did not comply with one or more DFARS requirements. Each DCAA report outlined significant business system deficiencies that impacted DoD’s ability to rely on information produced by the system. DCMA contracting officers did not take appropriate or timely action to address the significant business system deficiencies DCAA had reported. 

 You can find the full report, 32 pages, here:

http://www.dodig.mil/pubs/documents/DODIG-2016-001.pdf

There might be a more recent report. I have not looked.

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4 hours ago, joan said:

final rule February 2012, if I recall correctly.

ROI (Return on Investment) I performed internet search and was looking to see what "efficiencies" have resulted from this final rule.  Anyone?

thanks

Here is a link to the final rule published on 24 Feb 2012 that Joan appears to be referring to:

https://www.federalregister.gov/documents/2012/02/24/2012-4045/defense-federal-acquisition-regulation-supplement-business-systems-definition-and-administration

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None. While it has forced many contractors to enhance policies and procedures, and do more training, which are not bad things, the primary result of the rule is to create a new layer of government oversight and a new cottage industry of consultants who support contractors. The amount of fraud and waste deterred by the rule, to the extent it can be quantified at all, is effectively zero. Instead, contractors have ramped-up their overhead spending in order to assure compliance.

Thus, my assertion is that there has been a negative ROI, to the extent an ROI can be calculated.

 

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