Timing for Disclosing Self-Assessment on Government Property Management system – DCMA guidelines
For government contractors doing business with DoD, maintaining a Government Property Management business system is part of the requirements. Government Property Management business system is one of the 6 business systems. According to the DoD business system rule, failure to meet the business system requirements can result in payment withholding. As part of the requirement, Contractors need to regularly conduct Contractor Self-Assessment (CSA) of the business system. See DCMA instructions:
3.7.4. In accordance with DFARS business system specific clauses, contractors are encouraged, or in some cases may be required, to perform self-assessments. A self-assessment process that identifies deficiencies, root causes, and implements effective corrective actions is beneficial to both the contractor and the Government. Leveraging contractor self-assessments may reduce audit time and potentially offers dollar savings or reductions in losses to programs.
However, how to manage the timing for disclosing the Self-Assessment to the Government Property Administrator (GPA) on the contract can be tricky. When a contractor discovers significant findings, after performing a Contractor Self-Assessment, should you immediately inform the GPA?
DCMA guidelines do ask the contractors to report deficiencies to the Contracting Officer, who will ask the auditors to verify the findings.
220.127.116.11.1. System deficiencies identified by the contractor as a result of a self-assessment are generally reported to the functional specialist or auditor responsible for performing a review of the business system. When the contractor identifies deficiencies, as a result of a self-assessment, the functional specialist or auditor should validate the accuracy of the contractor’s findings, identifying significant deficiencies as well as the sufficiency of corrective action. If the contractor reports system deficiencies as a result of a self-assessment to the CO, then the CO shall request the functional specialist or auditor to validate the accuracy of the contractor’s findings, identifying significant deficiencies and comment on any corrective actions implemented.
On the other hand, DCMA guidelines also specify that the CO shall not apply payment withholds unless the contractor is given due process.
18.104.22.168. When significant deficiencies are identified as a result of contractor self-assessment of a business system, the contractor normally implements corrective actions. In such cases, the ACO shall not apply payment withholds to contracts containing DFARS252.242-7005 (Reference (e)), unless the contractor is given due process. When the due process results in the disapproval of a business system and the contractor has submitted an acceptable CAP and is effectively implementing the plan, the CO should consider initiating withholding at 2 percent to applicable contracts. The application of this withhold considers corrective actions already taken by the contractor.
So our take away from going through these DCMA guidelines are:
- Perform contractor self-assessment regularly
- Take action quickly to address the problems and have a Corrective Action Plan (CAP)
- Inform the CO when you have a very clear plan of actions, and timeline for completing the improvement.
If you need help in preparing for Contractor Self-Assessment, you can download this paper published in National Contract Management Magazine, “How to Prepare for the Self Certification of the Government Property Management System?”