areas. The Federal Supply Service, GSA, publishes

a Directory of U.S. Government Inspection Services and

Testing Laboratories.

To a degree, these two directories

are duplicative. However, it is believed that a

combined directory, greatly expanded to reflect a total

plant cognizance program would facilitate

the success of a cross-servicing program. In view

of the fact that DOD has by far the largest and most wide-spread field contract organization, their directory appears to be the most logical base for developing the government-wide directory. It should be DOD's responsibility to establish a focal point and furnish the name of the cognizant contract administration office to

purchasing activities which desire field contract

administration assistance; and in so doing, to minimize duplication of in-plant contract administration.

Improved Communications

-

Aside from DOD personnel

and a number of ex-DOD personnel in the civilian agencies, most others interviewed did not have a clear understanding of the organization, methods, and procedures employed by other contract administration offices. It was generally agreed that a need exists for improved formal and informal communications among key Government contract administration personnel in all agencies concerned.

Accordingly, the Commission believes that an InterAgency Contract Administration Council should be established at the Washington, D.C. level. This council should be

composed of representatives of those agencies who have formally organized field contract administration offices, in addition to those who can use those offices on a

cross-servicing reimbursable arrangement.

The represen

The

tatives assigned to this council should be dedicated solely to the functional area of contract administration and be of a sufficiently high management level to speak with authority for the agencies they represent. Council would concern itself with subjects of national contract administration interest. A suggested format for this council, based on the highly successful Federal Audit Executives Council, is shown in Appendix C.

The concept of a Federal contract administration services organization would be an ideal topic for the inter-agency council to investigate, once it is determined that a successful cross-servicing program is a reality. Such an organization would provide a means to maximize the use of scarce contract administration resources and

minimize the paperwork burden on Government contractors and the agencies concerned with the administration of

contracts.

The Office of Federal Procurement Folicy should expedite promulgation of a Federal Government policy on voluntary cross-servicing of contract administration.

The Office of Management and Budget should insure that agency budgets for funds and manpower authorizations to cross-service field contract administration are adequate to fund reimbursement requirements for the agencies performing field contract administration.

The Office of Federal Procurement Folicy should direct publication of a national plant cognizance directory which is based on current assignments and merges the Department of Defense Directory of Contract Administration Services Components and the Federal Supply Service Directory of U.S. Government Inspection Services and Testing Laboratories.

The Office of Federal Procurement Policy should designate the Department of Defense as the focal point to maintain the plant cognizance data base and to furnish this information to requesting agencies.

The Office of Federal Procurement Policy should establish an inter-agency contract administration council composed of senior management representatives from those agencies which furnish field contract administrative services and from those which will request and use field contract administration services.

Progress Payments

Project Summary

Both ASPR and FPR provide for progress payments to contractors based on costs incurred under certain fixed price

contracts. To obtain these payments, contractors are required to complete and submit a complex form that requires the development of detailed data, most of which is not used by the Government to evaluate the validity of the claim. currently submit approximately 100,000 requests annually.

Contractors

The Commission found that experts using the form in both industry and government considered it objectionable. Progress payment forms could be eliminated and requests submitted on a commercial invoice by adding four supplemental data items to that invoice. Procedures could be developed to protect the Government's interests and save contractors between $2 million and $5 million annually. These savings eventually would flow to the Government in the form of reduced contract prices.

Background

Many government contracts for supplies or services at fixed prices allow the contractor to receive interim, or

progress payments.

Their purpose is to help finance the

contractor's work in process when substantial costs are

incurred long before delivery of items.

Government evaluators, who may include contracting officers, engineers, auditors, production specialists, quality assurance representatives, and price/cost analysts, have criticized the progress payment request form as being unduly complex and have stated that much of the required data is not needed or used in the review of each request. Experience shows that the vast majority of requests are approved on the basis of the contractor's reputation and on evaluation of the data already on hand reflecting the status of the contract, not on an analysis of the the data shown on the request form. Furthermore, restrictive time frames for approving payments usually preclude detailed analysis of contractors' requests prior to payment. The cost of preparing the form enters, of course, in the contract price the government pays for its supplies and services.

Four agencies are primary users of this contract financing technique: DOD, Department of Transportation (DOT), National Aeronautics and Space Administration (NASA),

and GSA.

These are DD

Two forms and one format were examined. form 1195, DoT form F 4420.2 and GSA format 529. The DOD form, when approved by OMB in 1972, carried an estimate of