Tuesday, October 15, 2013

DFARS Proposal Adequacy Checklist - Subcontracts Requiring Audit

Last March, the DoD published a proposal adequacy checklist in their FAR Supplement (DFARS). This checklist must be completed by DoD contractors whenever they submit proposals where certified cost or pricing data is required. The checklist does not specifically apply to subcontractors however some contractors have flowed down the requirement as part of their own solicitation instructions. Additionally, some contracting officers and auditors are pushing it on to non-DoD contractors. Although not specifically required, its often easier to complete it than to fight over whether it is applicable. Its not a bad checklist nor is it onerous. It should help contractors to ensure certain things are not omitted due to oversight.

Now that the checklist has been required for about six months, we're beginning to see a pattern emerge on the level of detail required when responding to some of the checklist questions. As is typical, the Government has an insatiable appetite for details, supporting data, and explanations while contractors tend to look at things in a more "matter of fact" view - is it there? Yes or No.

One of those questions that is causing a bit of friction is Question No. 15. That question, referencing DFARS 215.404-3 asks: "Has the offeror identified in the proposal those subcontractor proposals, for which the contracting officer has initiated or may need to request field pricing analysis?"

The problem here is that DFARS 215.404-3 makes no such requirement. It merely tells contracting officers to refer to PGI (Procedures, Guidance, and Information) 215.404-3 when reviewing subcontract proposals. (PGIs are internal DoD policies and procedures and do not apply to contractors) PGI 215.404-3 states that contracting officer should consider the need for field pricing analysis and evaluation of lower-tier subcontractor proposals, and assistance to prime contractors when they are being denied access to lower-tier subcontractor records. It also offers some things for contracting officers to consider when deciding to accept the results of the prime contractor's review and analysis of subcontractor proposals. It may be that the Government is not comfortable with the results of the prime contractor's review and wants to go out and get its own field pricing support in addition to what the prime contractor has done.

Providing a list of subcontractors that need to be audited might facilitate the contracting officer's offer to assist prime contractors and may expedite the eventuality, but such a list is not required by FAR or DFARS.

Just saying.

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