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Certification Requirements Training

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We re drowning in information and starving for knowledge. -Rutherford D. Rodgers Topics Defining Risk Risk Management Tools Risk Management Solutions Defining Risk ... – PowerPoint PPT presentation

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Title: Certification Requirements Training


1
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2
Managing Subcontractor Compliance
Breakout Session Jeffery A White, C.P.M.,
President/CEO J.A. White Associates, Inc. Date
December 5, 2005 Time 210 p.m.
3
  • Were drowning in information and starving for
    knowledge.
  • -Rutherford D. Rodgers

4
Topics
  • Defining Risk
  • Risk Management Tools
  • Risk Management Solutions

5
Defining Risk
  • Contractor operations expose Government to risk
  • Financial
  • Quality
  • Delivery

6
Contractual Relationships
7
Risk Management Tools
  • Prime Contract
  • Terms and Conditions
  • Statement of Work
  • Subcontracts
  • Numerous Laws and Regulations
  • Flowdown Clauses
  • Truth in Negotiations (FAR Part 15)
  • Cost Accounting Standards (FAR Appendix A)
  • Right to Audit Clauses (FAR Part 14 and 15)

8
Risk Management Tools
  • Selection of Subcontract Type FAR Part 16
  • Small Business Subcontracting Plans (FAR Part 19)
  • Consent to Subcontract (FAR Part 44)
  • Advance Notice (FAR Part 44)

9
Risk Management Tools
  • Sarbanes-Oxley Act
  • Make or Buy Program (FAR Part 15)
  • Competition in Subcontracting (FAR 52.244-5)
  • Proposal Analyses (FAR Part 15)
  • Contractor Purchasing System Review (FAR Part 44)

10
Risk Management Tools
  • Subcontracting for Commercial Items (FAR
    52.244-6)

11
CPSR The Customers Review
  • Measures How Efficiently and Effectively a
    Contractor Spends Government funds and
  • Evaluates Compliance With Government
    Subcontracting Policies, Regulations, and Laws.

12
CPSR The Customers Review
  • Subcontractors Government business volume
    exceeds 25 million (excluding competitive FFP,
    competitive FFP/EPA contracts/subcontracts, and
    commercial item acquisitions)
  • Whenever an Administrative Contracting Officer or
    Procuring Contracting Officer specifies

13
CPSR Risk Assessment Basis for Selection
  • CPSR Approval History
  • Identified by PCO or ACO
  • Increased Sales to Government
  • Growth
  • Pre-Award Surveys
  • Major Programs/High Visibility
  • Other Audits
  • Self Assessment Activities

14
CPSR Identification of Risk Factors
  • Signs of a Weak Purchasing System Identified
    During Self Assessments
  • Inadequate Procurement Lead Time
  • Violation of Public Laws
  • No or Poorly Written or Implemented Policies
  • No or Weak File Documentation
  • Lack of Upper Management Commitment to Compliance
    with Procurement Regulations

15
Opportunities for Success or Failure
  • 98 of firms will not pass their initial CPSR!
  • Our proven process has allowed 100 of our
    clients to pass their initial CPSR!

16
Impact of an Unsuccessful CPSR on Contractors
Losing The Competitive Marketing Advantage!
  • Source Selection Implications
  • Past Performance Implications
  • Losing A Competitive Proposal
  • Loss of Revenue

17
Impact of an Unsuccessful CPSR on Contractors
Long-Term External Compliance Oversight Impact
  • Defense Contract Audit Agency or Inspector
    Generals (and Other Audit Agencies) Alerted
  • Other Audits Will Follow
  • Possible Negative Press

18
Impact of an Unsuccessful CPSR on
ContractorsProcedural Burdens with Project
Management Impact
  • Increase Administrative Contracting Officer
    Surveillance
  • Delay in Placing Orders
  • Increase Administrative Expenses
  • Delayed Billings Collections

19
Impact of an Unsuccessful CPSR on
ContractorsCostly Internal Compliance Impact
  • Implement Corrective Actions
  • Change Processes
  • Change Culture
  • Implement Training Program
  • Prepare for Follow-Up Audit

20
Contractor Risk Assessment Self-Governance
  • CPSR Training Guide Allows for Self-Governance
  • Encourages Contractor Participation in CPSR
  • Encourages the Use of Contractor Self-Assessments
    as Part of CPSR Process

21
Why Self Governance?
  • Pro-Active Compliance
  • Legal
  • Ethics
  • Cost Avoidance
  • Pro-Active Process Improvement
  • Changing Customer Oversight Environment
  • Commercial Focus
  • Customer Relations
  • Competitive Edge

22
Self Governance Process
Market Concept
Develop Audit Plan
Conduct Self Assessments
Develop MOU
Re-visit Audit Plan
Baseline CPSR
Implementation
23
Self Governance Process
  • Develop Audit Plan
  • Audit Frequency
  • Audit Duration
  • Audit Personnel
  • Audit Protocol
  • Tools/Reports Formats
  • Corrective Action Process

24
Self Governance Process
  • Conduct Self Assessments
  • Could Lead to
  • Training Initiatives
  • Process Improvements
  • Process Re-engineering
  • Standardization
  • Identification of Staffing Needs

25
Self Governance Process
  • Self Assessment Methods
  • Peer Reviews
  • Management Reviews
  • Dedicated Audit Teams
  • External Resources

26
Self Governance Process
  • Internal and External Marketing
  • Champions Include
  • Executives
  • CPSR Team Leaders
  • ACO
  • Management Councils
  • DCMA
  • DCAA

27
Self Governance Process
  • Baseline CPSR
  • Joint Contractor/Government Review
  • Review Validates Self Assessment Efforts
  • Ensures Apples-to-Apples Interpretations and
    Processes

28
Self Governance Process
  • Re-visit/Adjust Audit Plan
  • QA Issues
  • Sampling Process
  • Regulatory Updates
  • Review New Processes

29
Self Governance Process
  • Develop MOU
  • Incorporate Audit Plan
  • Frequency of Reporting to ACO
  • Follow-up Joint Reviews

30
Self Governance Process
  • Benefits of Implementation
  • Real-Time Corrections
  • Real-Time Training
  • Pro-Active Customer Oversight
  • Pro-Active Compliance
  • Competitive Advantages

31
Presented by
Jeffery A. White, C.P.M. President J.A. White
Associates, Inc. 1341 Garner Lane, Suite
104 Columbia, SC 29210 803.407.1399
x101 803.407.0256 (fax) Jawhite_at_jawhite.com www.ja
white.com
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