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and should be modified to reflect any changed conditions during subsequeat

meetings. The schedule and resource limitations of participating organi

zations will be considered in preparing the annual plan.

The plan will identify the organizations having the primary responsibility

for performing the reviews:

: (1) CAS will review the technical aspects of contractor operations

requiring minimal or no access to contractors' financial and accounting

records and will sign reports on these reviews.

(ii) DCAA will review the financial and accounting aspects of con

tractor operations requiring minimal or no technical considerations and

will sigo reports on these reviews.

(iii) CAS and DCAA will jointly perform reviews requiring significant CAS and DCAA expertise. Reports resulting from these reviews

will be signed by the heads of the respective local organizations.

Some operations reviews such as the purchasing (CAS) and estimating

system reviews (DCAA) are assigned to the responsible reviewing organiza.

tion by ASPR. These assignments will continue to be recognized. All

others will be performed according to the above criteria. The annual plan will be formally approved by both the head of the local CAS organization

and the head of the local DCAA resident office.

(c) Joint Review

(i) Objective. The objectives of joint CAS-DCAA auditor reviews of

contractor operations are:

(1) To optimize the utilization of DCAA-CAS personnel ia per: forming selected operations reviews,

(2) To generate joint reports of the reviews that contais findiags, conclusions, and recommendations mutually agreed upon by the DCAA auditor and the CAS organization to improve the effectiveness aad economy

of contractor operations.

(ii) Eet Confereace with Contractor. During the course of the review, there may be several informal briefings with contracto: management personnel to exchange information. Every opportunity sbould be afforded each party, to either update the information provided or to conduct additional reviews to preclude misconceptions that could develop as a re. sult of obtaining incomplete or inaccurate data. As exit conference with contractor management personnel provides the opportunity to explais CASI DCAA fiadings, conclusioas and recommesdatioss. Os joist reviews, the ACO or dis representative shall arrange the exit conference with the cor. tractor which is consistent with the ese face to industry concept. Botá CAS and DCAA will be represented at the exit conferesce.

(2) Reports. An reports prepared separately or jointly by DCAA o: CAS personnel will be forwarded throege the ACO to the coetzacter. Waile taese review sports are advisory to tae 460. .co bas respoesibility to assure that (D) appropriate recognitiee is gires to the reseks e reà reviews in any contract negotiatives asd (19 that the ceetracter implemeats appropriate corrective actions. Devent of any dispete vite the contracter, the ACO has the ultimate responsibility and authority to effect final settlement.

Case 74-99
Case 74-101

PROPOSED ASPR 7-203.XX.

7-203.XX Notice of Intent to Disallow or Not Recognize Costs

In accordance with 15-206(a), insert the following clause in all cost

reimbursement type and flexibly priced contracts.

NOTICE OF INTENT TO DISALLOW OR NOT RECOGNIZE COSTS (

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(a) Notwithstanding any other provision of this contract,

the Contracting Officer may,

at any time, issue to the Contractor

a written notice of intent to disallow or not recognize costs.

This notice will indicate the Contracting Officer's intent to

take exception to specified costs being incurred, or planned

or incurrence, which he has determined not

be

llowable in

accordance with the terms of this contract.

(b) The Contractor may, within thirty (30) days of receipt of

such notification, submit written objections to the Contracting

Officer, together with justification therefor, against the pro

posed cost exception.

(c) In the event the Contractor does not file any such written

objection within the thirty (30) day period in (b) above, the notice

shall serve as the Contracting Officer's final decision under the

provisions of the clause herein entitled "Disputes."

(a) The Contracting Officer shall, within sixty (60) days of

receipt of any written objection, either withdraw the notification

or issue a final decision thereon under the provisions of the clause herein entitled "Disputes."

(e) Pending final resolution, the Contractor shall not

be reimbursed or paid for costs which are the subject of this

notice.

(1) Failure to issue a notice pursuant to this clause shall

not alter the Government's rights with respect to exception to

incurred costs.

(End of clause)

7-104.XX Notice of Intent to Disallow or Not Recognize Costs

Insert the clause in 7-203.XX in all fixed price incentive contracts

and contracts providing for price redetermination.

7-402.XX Notice of Intent to Disallow or Not Recognize Costs.

Insert the clause in 7-203.XX.

7-605.XX Notice of Intent to Disallow or Not Recognize Costs.

Insert the clause in 7-203.XX.

7-702.XX Notice of Intent to Disallow or Not Recognize Costs.

Insert the clause in 7-203.XX.

7-703.XX Notice of Intent to Disallow or Not Recognize Costs.

Insert the clause in 7-203.XX.

7-704.XX Notice of Intent to Disallow or Not Recognize Costs.

Insert the clause in 7-203.XX.

7-706.XX Notice of Intent to Di sallow or Not Recognize Costs.

Insert the clause in 7-203.XX.

7-1909.XX Notice of Intent to Disallow or Not Recognize Costs.

Insert the clause in 7-203.XX.

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