Thursday, September 23, 2010

More on Participation in the Direct Billing Initiative

Back on August 18th, 2010, we reported on a new policy by DoD that removed the major impediment to small contractors participating in the direct billing program. Go here to read that posting. To summarize, DoD removed the words "for contractors with approved billing systems" from the DFARS 242.803(b)(1)(C) criteria for participating in the direct billing process. DoD's stated intent here was to reduce administrative costs and conserve resources in processing low risk payment vouchers.

Well, there seems to be a definitional issue with the term "approved". DCAA has not changed its guidance. The latest Contract Audit Manual on this topic, which carries a date of September 16, 2010, continues the same coverage it always had concerning the qualification of contractors for participating in the direct bill program, to wit, they must have an "adequate" billing system. "Approved" and "Adequate" are two different things, according to one DCAA auditor.

What is the point of the DFARS "Class Deviation" that relaxes the billing system requirement if the Agency that is tasked with approving contractors for the direct bill program is ignoring it? If you are affected by this inter-agency game of "chicken", you need to elevate the matter to your ACO and if that doesn't work, your PCO.

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