specialists in monitoring contractor costs through coordination with their various organizations. (b) The CMC shall be responsible for: (i) Preparing and maintaining an annual consolidated written plan and schedule for reviewing contractor operations from coordinated long-range plans established by each team member including the DCAA auditor. This composite plan and schedule will assure cost monitoring responsibilities are being fully implemented and that the technical and professional expertise of various organizational units of the Contract Administrative Service (CAS) organization and the Defense Contract Audit Agency (DCAA) auditor are used without duplication of effort or skills. (11) Coordinating the performance of the cost monitoring effort of the organizational units of the CAS organization. (iii) Coordinating the cost monitoring efforts of the CAS organisation with those of the DCAA auditor. (iv) Advising the head of the CAS organization of situations where the contractor should correct conditions, policies, or practices which are not considered the most economical and efficient for the performance of Government contracts, and recommending corrective action, including issuance of formal written notices to the contractor advising of specific costs which will not be allowed if incurred. (v) Coordinating CAS actions to assure that the procuring contracting officer, project manager, the head of the procuring activity, DCAA, and other responsible officials are informed of relevant matters significantly affecting the most economical and effective performance of Government contracts. (vi) Coordinating actions to assist the CAS organization, DCAA, and other Government personnel in obtaining access to pertinent contractor policies, procedures, and related data, and obtaining the assistance of the head of the CAS organization when such access is being denied or impaired. (vii) Maintaining an inventory of CAS, DCAA, and other Government reports on significant issues relating to monitoring costs. (viii) Continuously monitoring the status of recommendations made to the contractor concerning cost performance stemming from all Government reports. This responsibility includes insuring that all outstanding recommendations are recognized in pricing actions. While the contractor is responsible for managing their direct and indirect costs, the CMC monitors the contractors' effort through this task. event the contractor fails to take timely action, the monitor should prepare for the ACO's signature a formal notification that the Government will as of a specified date disallow all costs that would not be incurred had the recommendation been implemented (see 15-206). (ix) In the Maintaining current organizational charts of the con tractor's operations compatible with the contractor's budgetary system. (c) The plan required by (i) above must be tailored to the contractor, taking into account the extent of competition in awarded contracts, the contractor's operating methods, the nature of work being done, procurement cycle stage, business and industry practices, types of contracts involved, degree of technical and financial risk, ratio of Government/ commercial work. and extent that performance efficiencies have been previously demonstrated. The plan should stress the importance of anticipating potential problems and provide a means of calling them to the attention of the contractor at an early stage so that preventive action can be taken. Reviews required by ASPR and the contracting officer must be included in the plan. 20-1006 DCAA Auditor Responsibility. DCAA audit offices are responsible for performing all necessary contract audit for DoD and providing accounting and financial advisory service regarding contracts and subcontracts to all DoD components responsible for procurement and con tract administration. The auditor is responsible for submitting informa tion and advice based on his analysis of the contractor's financial and accounting records or other related data as to the acceptability of the contractor's incurred and estimated costs, as well as for reviewing the financial and accounting aspects of the contractors' budgetary systems. The auditor is also responsible for performing that part of reviews and such analysis which requires access to the contractor's financial and accounting records supporting proposed costs or pricing data, regardless of the dollar amount involved. This does not preclude the Program Manager, PCO, . Plant Rep/ACO, or their technical representatives from requesting any data from, or reviewing records of, the contractor (such as CSCS/C data, lists of labor operations, process sheets, etc.) necessary to the discharge of their responsibilities, Contract administration services organizations will utilize the auditor's services whenever such expertise is needed, particularly regarding the contractor's financial management reports, books, and records. 20-1007 Procedure - (a) Selecting Operations for Review. It is not possible to review all elements of a contractor's entire operation each year. Therefore, the CMC, together with the auditor, is to select for review those operations that have the greatest potential for charging Government contracts with significant amounts of unacceptable costs such as those resulting from inefficient and uneconomical operations. To select these cost-risk areas on a sound and orderly basis, an overview must first be obtained of the contractor's entire operation. Before the beginning of each Government fiscal year, the CMC should arrange for a joint meeting between CAS personnel, the DCAA auditor, and other directly interested Government representatives to coordinate selection of the areas to be reviewed during the coming year. The following data will be used in the selection process: (i) Contractor's total budget package broken down by functions for the coming year and the latest survey of the budgetary system (DCAA auditor responsibility). (ii) Detailed organizational charts for the contractor's entire operation (CAS responsibility). (iii) An outline of the contractor's accounting system to understand the flow of costs by function (DCAA auditor responsibility). (iv) The determination of Government participation in the dollars attributable to the operations and cost accounts under consideration (DCAA auditor responsibility). (v) A complete list of recent reviews and audits performed by CAS, the DCAA auditor, and other Government representatives that would effect the selection of areas to be reviewed in the current year. This listing should show outstanding weaknesses and deficiencies in the contractor's operations (CAS responsibility). (vi) Evidence of under and overstaffing (CAS-DCAA auditor responsibility). (vii) Significant departures from established contractor product ivity standards (CAS responsibility). (viii) Major financial variances from budgets in prior years (DCAA auditor responsibility). (ix) Evidences of idle or underused capacity (CAS-DCAA auditor (b) Planning for Reviews. The primary purpose of the joint meeting described above is to develop a mutually acceptable annual plan for reviewing the contractor's operation. The plan should provide coverage for each significant operational area of the contractor over a period of 2 to 3 years |