the establishment of a CACO, but a Department or Agency believes a CACO assignent is required, such determination requires approval of the Secretary of the Department (see 1-201.15) or his designee. Decisions to initiate or discontinue a contractor's participation in the DOD CACO program should consider such factors as (1) the benefit to be derived by the Government from coordination and liaison at the corporate level; (ii) the volume of Government sales; (iii) the degree of control exercised by the contractor's corporate office over Government-oriented lower tier operating elements; and (iv) the impact of corporate policies and procedures on these elements.] Corporate administrative contracting officers,-when-waranted, shall be assigned as follows:

(a) When all divisions of a corporate entity are under the contract administration cognizance of a single department, that department shall be

determine-the-necessity-for-and-designate-the-component-of-that-department

responsible for assigning the CACO.

(b) When a corporate entity has divisions under the contract administration cognizance of more than one department, CACO assignments shall be determined by majority-vote-among the departments concerned. When agreement cannot be reached or-an-appeal-is-desired-against-a-najority-deeision, the matter shall be referred to the-office-of the Deputy Assistant Secretary of Defense (Installations-and Logisties) Procurement for resolution.

Any-contract-administration-office

which-believes,-that-with-respect-to-a-specific-contractory-the-appointment-of a-CAGO-is-neededy-will-recommend-cuck-action-to-their-departmentak-headquarters and-request-designation-of-a-coordinator-until-the-matter-is-fully-resolvedv

The primary criterion determining the department responsible for assignment of

a CACO will be the unliquidated dollar balance of contracts being administered.

Thio-information-may-be-requested-from-the-appropriate-GAS-components-by-the,

departmental-coordinater---Other-important-considerations-should-include-the

geographie-location-of-the-serperate-officey-the-location-of-the-contract-audit

coordinator-and-any-other-particular-factors-which-may-be-relevant-to-the-particular-case. When CACO responsibility has been assigned, that office Department shall notify the Director of the Defense Supply [Logistics] Agency, Attention: DGAS-JP, DLA-A], in order that information concerning the CACO assignment may be included in the DOD Directory of Contract Administration Services Components (DOD 4105.59-H).

20-904. Duties and Responsibilities of the CACO

(a) Concurrently-with-the-assignment-of-a-CAGO,-d Duties and responsibilities of the CACO shall be selected-from-the-functions-listed-in-2-406 whichy-in-whole-or-in-party-should-be-performed on a corporate-wide basis. The specific contract administration functions in 1-406 to be performed by the CACO items shall be determined by majority-vote-among the Departments concerned. When agreement cannot be reached er-an-appeak-is-desired-against a-majority-decision, the matter shall be referred to the-office-of the Deputy] Assistant Secretary of Defense (Installations-and-Logisties) (Procurement)]

for resolution.

(b) The CACO shall be responsible for the negotiation-and procurement] determination of [final] eorporate-or-home-office overhead rates for cost reimbursement type contracts (3-700) the establishment of advance agreements or recommendations on corporate/home office expense allocations; and for

the negotiation of advance agreements for independent research and development costs and bid and proposal costs (15-107, 15-205.35, and 15-205.3) except when this responsibility is assigned in the master list published annually in a Defense Procurement Circular for Tri-Service Departmental negotiation. Departmental Tri-Service contracting officers [activities may delegate such negotiations to established CACOs. The corporate-or-home-office-overhead-rates-nege

tdated-and-doller-amounts-allocated-in-accordance-with-the-negotiation-to-lesser

organizational-segments-of-the-contractor-such-as-groups, - divisione,- and-plants

are-not-subject-to-further-negotiation-or-audit-determination-by-Government

representatives-at-these-levels.

The CACO shall make full use of the Defense

Contract Audit Agency financial and advisory accounting services by including (1) maintaining close liaison with his audit counterpart, the Centraet-Audit Coordinator-(CAC), especially with when the acceptability of corporate-wide alicies are concerned; and (ii) utilization of advisory audit reports as contemplated by 3-705.

(c) The CACO shall keep divisional ACOs and-tri-service-groupe and DCAA advised of important matters under consideration, determinations made and shall solicit their advice and participation when appropriate. In addition, the CACO shall solicit advice and consultation from the Indirect Cost Monitoring Office

to assure consistent treatment of individual cost issues.]

20-1001 Scope.

This part sets forth guidelines for monitoring the policies, procedures, and practices used by contractors to control direct and indirect costs related to Government business. There is no intent in the following coverage to diminish the position of the ACO. Rather, the procedures

are intended to eliminate duplication in monitoring contractors' costs. 20-1002 Purpose. To ensure the most efficient and economical performance of DoD contracts, it is essential that contract costs be managed effectively. Contractors are responsible for managing and controlling their direct and indirect costs. However, DoD components need to systematically monitor the management of such costs to assure that contractors are fulfilling their responsibilities and Government work is, in fact, being performed in the most economical and efficient manner. 20-1003 Application. A formal program of Government monitoring

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of contractor costs should be conducted at all major contractor locations that are (1) expecting to have sales to the Government exceeding $50,000,000 during the next 12 months on other than firm fixed-price and fixed-pricewith-escalation contracts, (2) Government's share of indirect costs for such sales is at least 50% of the total of such indirect costs, (3) a

DoD Plant Representative has been established at the location, and (4)

the location is not CWAS qualified (see 3-1000), or at other critical locations with significant Government business where specifically

directed by the HPA..

20-1004 Designation of a Cost Monitor Coordinator.

The head

of the contract administration service organization cognizant of a contractor location qualifying for application under 20-1003 shall designate an individual on his staff to perform as cost monitor coordinator (CMC) for that location. The individual should be assigned no later than 60 days after the location becomes qualified. Decisions to implement or terminate cost monitoring should be based upon sound estimates of Government business for the coming year and not upon minor interim volume fluctuations. This does not preclude action to start or stop the program during a given year where there is a significant change in volume and the anticipated new level of business is expected to remain stable for a reasonable period of time.

20-1005 Responsibilities of the Cost Monitor Coordinator.

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(a) In performing his assigned contract administration duties, the Plant Rep/ACO acts as a high-level manager calling upon the various · specialists established within DoD to review and report on those areas that fall within their respective areas of expertise. It is not intended that the Plant Rep/ACO duplicate the functional capabilities or work of such specialists. Likewise, cost monitor coordinators in the contract administration service organization will fully utilize the work of these