DoD Contractor Estimating Systems Deficiencies Can Withhold 10%
A draft rule for business systems has been posted by the Government allowing the withholding of 10% of payments for each of six systems, with a maximum of 50% withholdings. These systems include contractor business systems including 1) estimating, 2) purchasing, 3) accounting, 4) earned value, 5) property and 6) material management.
In 2009 the congressionally chartered Commission on Wartime Contracting stated in its June 2009 interim report to Congress that:
“Weak control systems increase the risk of unallowable and unreasonable costs on government contracts”
Comments will be accepted until March 16, 2010. Email to dfars@osd.mil with subject DFARS Case 2009-D038.
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The committee that produced the report you cited in this blog was co-chaired by Michael J. Thibault. At one time he was the Deputy Director of DCAA. During the time he was with DCAA, he was the primary driver behind the Parametric Cost Estimating Initiative (PCEI). It was he and I that briefed the PCEI results to the Director, Defense Procurement. The PCEI work resulted in the FAR and RFP instructions becoming parametric cost model friendly and the development of the Parametric Estimating Handbook. Without his direct and active involvement, the PCEI and Parametric Estimating Handbook would not have happen.