New Reporting Requirement for Government Contractors - Part 3

Earlier this week we reported on a couple of new reporting requirements that will have a significant impact on the contracting community, particularly the one that, effective immediately, will require prime contractors to report the award of every subcontract over $25,000. This requirement applies to contracts over $20 million but this threshold drops to $550 thousand on October 1st and to $25 thousand on March 1, 2011.

Prime contractors must report data about their subcontract awards at the FFATA (Federal Funding Accountability and Transparency Act) Subaward Reporting System (FSRS). That site has user guides, a webinar, and frequently asked questions to assist contractors in fulfilling their reporting requirements.

On July 15th, the Department of Defense issued guidance to its acquisition community concerning the deployment of this new system. The key point of the memorandum is this, contracting officers must complete a contract action report in the Federal Procurement Data System (FPDS) before contractors can add subcontractor information in the FSRS. The FPDS pre-populates many fields in the FSRS. Contracting Officers have only 3 days to complete their FPDS contract action report (FAR 4.6). If contractors encounter any issues with pre-populated information, the FSRS help desk will simply refer contractors back to their contracting officers. If the contracting officer has entered incorrect data or omitted data in some fields, the contractor cannot correct it. Only the contracting officer can make the corrections.

Agencies will be required to conduct reviews of the prime contractors' reports. It is not clear at this time the intended scope of these reviews or their frequency. Although not specifically addressed, it is reasonable to expect that Government audit organizations (such as DCAA) will use the publicly available FSRS to assist it in their audit activities. You can read the DoD guidance memo here.