Friday, September 16, 2016

New Procedures for Submitting Payment Requests on NASA Contracts

NASA has published an interim rule affecting its contractors who submit payment requests under cost-reimbursable contracts. Until the 2016 NDAA (National Defense Authorization Act), oversight of billings by NASA contractors was administered by DCAA (Defense Contract Audit Agency). However, the 2016 NDAA now prevents DCAA from performing any work for non_DoD agencies. As a result, all non-DoD agencies that have been relying upon DCAA to provide contract audit oversight are scrambling to find alternatives to DCAA.

NASA notes that since DCAA discontinued its "voucher support" to NASA, timely payments to contractors for work performed has been jeopardized and that a new mechanism is needed to implement procedural changes to minimize delays to contractors and suppliers and avoid the potential accrual of Government interest payments to contractors.

The new rule designates a centralized payment office where NASA contractors can send their vouchers, instructions for preparing the payment request, and the requirement for backup documentation. The requirement for backup documentation is the aspect that is going to seem most onerous to NASA contractors, who generally, have not had to submit such documentation previously but have only been required to maintain it for when an auditor came looking. This documentation requirements includes:
  • Breakdown of billed labor costs and associated contractor generated supporting documentation for billed direct labor costs to include rates used and number of hours incurred.
  • Breakdown of billed other direct costs (ODCs) and associated contractor generated supporting documentation for billed ODCs
  • Indirect rates used to calculate the amount of billed indirect expenses., 
The rule also covers additional administrative matters such as the rejection of improper vouchers and re-billing for costs that were previously suspended or disapproved.

Presumably someone in NASA's billing office will be reviewing vouchers for accuracy and compliance. There is no provision for audit oversight of contractor billing systems - guess NASA contractors will now be on the honor system.

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