Title: Certification Requirements Training
1(No Transcript)
2Managing 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
4Topics
- Defining Risk
- Risk Management Tools
- Risk Management Solutions
5Defining Risk
- Contractor operations expose Government to risk
- Financial
- Quality
- Delivery
6Contractual Relationships
7Risk 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)
8Risk 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)
9Risk 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)
10Risk Management Tools
- Subcontracting for Commercial Items (FAR
52.244-6)
11CPSR The Customers Review
- Measures How Efficiently and Effectively a
Contractor Spends Government funds and - Evaluates Compliance With Government
Subcontracting Policies, Regulations, and Laws.
12CPSR 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
13CPSR 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
14CPSR 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
15Opportunities 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!
16Impact of an Unsuccessful CPSR on Contractors
Losing The Competitive Marketing Advantage!
- Source Selection Implications
- Past Performance Implications
- Losing A Competitive Proposal
- Loss of Revenue
17Impact 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
18Impact 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
19Impact of an Unsuccessful CPSR on
ContractorsCostly Internal Compliance Impact
- Implement Corrective Actions
- Change Processes
- Change Culture
- Implement Training Program
- Prepare for Follow-Up Audit
20Contractor 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
21Why Self Governance?
- Pro-Active Compliance
- Legal
- Ethics
- Cost Avoidance
- Pro-Active Process Improvement
- Changing Customer Oversight Environment
- Commercial Focus
- Customer Relations
- Competitive Edge
22Self Governance Process
Market Concept
Develop Audit Plan
Conduct Self Assessments
Develop MOU
Re-visit Audit Plan
Baseline CPSR
Implementation
23Self Governance Process
- Develop Audit Plan
- Audit Frequency
- Audit Duration
- Audit Personnel
- Audit Protocol
- Tools/Reports Formats
- Corrective Action Process
24Self Governance Process
- Conduct Self Assessments
- Could Lead to
- Training Initiatives
- Process Improvements
- Process Re-engineering
- Standardization
- Identification of Staffing Needs
25Self Governance Process
- Self Assessment Methods
- Peer Reviews
- Management Reviews
- Dedicated Audit Teams
- External Resources
26Self Governance Process
- Internal and External Marketing
- Champions Include
- Executives
- CPSR Team Leaders
- ACO
- Management Councils
- DCMA
- DCAA
27Self Governance Process
- Baseline CPSR
- Joint Contractor/Government Review
- Review Validates Self Assessment Efforts
- Ensures Apples-to-Apples Interpretations and
Processes
28Self Governance Process
- Re-visit/Adjust Audit Plan
- QA Issues
- Sampling Process
- Regulatory Updates
- Review New Processes
29Self Governance Process
- Develop MOU
- Incorporate Audit Plan
- Frequency of Reporting to ACO
- Follow-up Joint Reviews
30Self Governance Process
- Benefits of Implementation
- Real-Time Corrections
- Real-Time Training
- Pro-Active Customer Oversight
- Pro-Active Compliance
- Competitive Advantages
31Presented 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