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Gonzo

CPSR preparation LOE estimate

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Hello all, 

I have recently moved from a DoD contractor to an NGO without an Approved Purchasing System. This has not been an impediment for them, as they have only performed as a subcontractor under a handful of USAID prime contracts. However, there is interest in expanding their contracts portfolio and a desire to move beyond subcontracting into prime contracting. As that is the case, I have begun the process of determining how prepared we are as an organization for a CPSR audit. So far, it looks pretty grim. Little to no file documentation, no price/cost analysis being performed, policies and procedures exist but are likely insufficient or require revision, etc.. 

My question for the forum is: what is a *reasonable* estimate of level of effort to get a large (~$900M per year) NGO in a position to not get blown out of the water by a CPSR auditor? My extremely conservative estimate right now is 500 hours spread out across the org, but I think that is probably too low. Does anyone out there have experience in doing this? I know there are a number of consultancies out there that specialize in this, but as a non-profit that is already cost adverse due to some large IT investments in recent years, I suspect that leadership is going to want to keep this process in house as much as possible. Any and all feedback/advice/etc. would be appreciated. 

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Hey there Gonzo -

If I'm understanding correctly, you're looking to get to the point where you show up on the radar...you haven't been notified by the DCMA of a CPSR yet, correct?

If that's the case, don't spend your time shoring up what's already been done, just fix things going forward.  CPSR's typically cover a 12 month period that ends as close as is practical to the date the CPSR happens.

Time estimates are difficult to determine.  You could burn 500 hours just on policies and procedures if you're starting from scratch.  In a nutshell, you need to shore up your policies and procedures, implement new templates, and then train everyone on all of the above.  Your incremental effort will lie in the policy/procedure/template development as well as training and implementation time.

My recommendation:  find a consultant that can sell you pre-packaged policies and procedures, then use in-house labor to implement tools that will get your folks up to speed (plug SpendLogic *here*) and train to the procedures and tools that you've implemented.

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Patrick, 

Appreciate the quick response. We have not been notified of a CPSR yet. We are targeting a couple of large USG contracts opportunities in the next fiscal year, so I am trying to lay the foundation now before it becomes a panic post-award/once a notification is received. The good news is my predecessor did a decent job of getting some policies in place, but lack of use and general disinterest from leadership in the past means that they are pretty bare bones and our institutional "muscle memory" in implementation is very weak. I am curious about the consultant route and will likely look into it to determine if it is a viable option. We have the added challenge of also trying to build out our capacity for contracting with overseas entities as well, so resource limitations may play a part in how we proceed.  

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Gonzo, the Government right to conduct a CPSR review requires that FAR 52.244-2 be included in the USAID prime. I am not familiar with USAID contracts and Agency contract clauses. Do they usually include FAR 52.244-2?

Thanks for the info.

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I have experienced success with DFARS Business Systems using the following approach:

1. Do NOT focus on compliance. Focus instead on Process and People. (If you need a triplet, add Technology.)

2. Understand the current processes. (Sounds like you are doing this.)

3. Identify necessary changes to processes.

4. Document the "future state" processes in your policies and procedures. The new processes should be driven cross-functionally; they should be driven "ground-up" not "top-down".

5. Train your people in the new policies, procedures, and practices.

6. See how effective the new PP&P are. If necessary, revise them. If people aren't getting them right, train them again.

7. Hold people accountable for compliance with the new PP&P. Reward the people who get it right; discipline the people who intentionally fail to comply.

If you focus on process improvement and training, you will find you have achieved compliance.

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Hi Neil, 

FAR 52.244-2 is included in USAID prime contracts. One interesting wrinkle between the DOD and civilian worlds that I've heard is that civilian agencies are now being audited by accounting firms rather than DCAA due to the backlog of audits. Curious to see how that is going to work in practice and whether or not it's a "good" thing. 

Here_2_help: Those are good points and I very much agree with your final point about process and training being keys to success. One of the big issues I am confronting is simply unfamiliarity with proper procurement procedures. People really just don't know the difference between assistance sub-recipient agreements vs. acquisition/procurement subcontracting. There is no "contracts culture" here to speak of, so I am going to have to determine the current state (almost there) and then define the future state, and then I am going to have to really train people up on basic contracts process and compliance knowledge. The good news is that the volume of proposal opportunities is relatively low, but that's a double edged sword because it's "in one ear, out the other" if people aren't consistently applying the knowledge and skills. It's going to be a big challenge. My colleagues are all smart, competent professionals, but this is just a whole new world for them. 

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7 minutes ago, Gonzo said:

Hi Neil, 

FAR 52.244-2 is included in USAID prime contracts.

 

Thanks for the info, Gonzo. If your firm handles cooperative agreements or grants, though, I expect that FAR 52.244-2 would not be included because FAR indicates such transactions are not contracts.   

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