Click to edit Master title style

Click to edit Master title style

Click The to Business edit Master title style Operations Center and CPSRs Breakout Third Session level # D08 Andrew C. Obermeyer, Director, DCMA Business Operations Center Karen Zinn, Team Leader, DCMA CPSR Group Date: Tuesday, July 28, 2015 Time: 11:15am 12:45 pm 1

Centralized Click to edit Lines Master of title Service style Contractor Purchasing System Review Group Functions: Plant Clearance Group Business Operations Center Terminations Group Property Group Evaluate contractor s purchasing systems and provide expert recommendations whether to approve or withhold/withdraw approval of the system. Arrange timely and cost effective reutilization, sale, and disposal of excess government property in the possession of contractors. Settle contracts terminated for the convenience of the Government. Evaluate the adequacy of contractor s property management system to ensure Government Property in the hands of contractors is appropriately managed. 2

Fort Lee, VA Boston, MA Smyrna, GA Phoenix, AZ Dallas, TX Click CPSR to ORGANIZATIONAL edit Master title style STRUCTURE DCMA-AQB Andrew C. Obermeyer Director Business Operations Center Ft. Lee, VA DCMA-AQBC Elizabeth Alicea Director CPSR Group Boston, MA Kathy Wehner Management Assistant DCMA-AQBCA Northeast Team (Boston, MA) John Foley Supervisory Procurement Analyst DCMA-AQBCB Southeast Team (Smyrna, GA) Randy Shelby Supervisory Procurement Analyst DCMA-AQBCC Northwest Team (Phoenix, AZ) Richard Seals Supervisory Procurement Analyst DCMA-AQBCD Central Team (Dallas, TX) Karen Zinn Supervisory Procurement Analyst 9 - Procurement Analysts, GS-12 1 - Procurement Analyst, GS-11 8 - Procurement Analysts, GS-12 1 Procurement Analyst, GS-11 8 - Procurement Analysts, GS-12 1 Procurement Analyst, GS-11 8- Procurement Analysts, GS-12 1 Procurement Analyst, GS-11 3

Click to edit Master title style What is the CPSR mission? Click Ensure to edit that Master suppliers text have styles purchasing Second level systems in place that contribute to effective subcontract management. Effective subcontract management includes development of, as well as performance to, internal policy and procedures, public laws and adequacy of cost and price analyses performed on subcontractors. 4

Click What to is the edit purpose Master title of a style CPSR? Contractor Purchasing System Reviews Click to edit Master text styles Evaluation of the efficiency and effectiveness with which the contractor spends Government funds and complies with Government policy when subcontracting Complete evaluation of a contractor s purchasing of material and services, subcontracting, and subcontract management from development of the requirement through completion of subcontract performance Report findings to Contracting Officer providing a basis for granting, withholding, or withdrawing approval of the purchasing system Review corrective action plan for effectiveness and validate implementation 5

Click What to are edit the Master review title categories? style Types Click to of edit CPSRs Master text styles Initial Second level Comprehensive Special Follow-up First two types include same 24 elements of analysis listed at DFARS 252.244-7001-(c) Last two types are tailored to need 6

Click Who determines to edit Master the title need style for a CPSR? Annual FY Eligibility Tasker includes Risk Assessments Click to edit Reference Master FAR text 44.302(a) styles Second level Qualifying Sales of $25 million Subcontracting volume, complexity and dollar amount Contractor» Fifth past level performance ACO identification of risk DCMA List of Potential Contractors built from MOCAS data about 600 CAGE codes yielding 375 potential reviews ACOs solicit input by the Contractors and perform RA using policy template Eligibles determined by CPSR team with ACO input and coordination 7

Click How does to edit the Master CPSR title Group style schedule reviews? CPSR Group develops the annual schedule based on: Click to edit Master text styles Risk Assessments received from ACOs from the annual tasker, Any Second other risk assessment level received from an ACO throughout the year, DCMA s Contract Business Analysis Repository (CBAR) etool for: Not Yet Evaluated Systems (Who meet the criteria for a CPSR) Disapproved» Fifth Systems level who may require a Follow-up review Approved Systems with a system approval date of 3 years or greater Required reviews are then prioritized based on risk to the Government. Reviews are assigned to a regional CPSR team based on most cost effective travel costs. Teams coordinate final review dates with the Contractor and ACO. 8

Click What to is the edit cycle Master time title for style a CPSR? CPSR Timeline Click to edit Master text styles R-120 Final Schedule Agreement R-90/60 CPSR Data Questionnaires to CO R-90/60 CPSR Data Questionnaires to Contractor POC R-30 Policy Fourth and level Universe Reviews R-30 Request» Fifth T&Cs, level Purchasing/Procurement forms from Ktr Review Entrance Brief, Daily Outbrief, Exit Conference R+20 CPSR Report due to CPSR Management R+30 Management review, Report to CO R+40 CO approval if no deficiencies, or initial determination R+70 Ktr response to initial determination R+115 Corrective Action Plan if requested, due to CO 9

Click Most common to edit Master CPSR title findings style Based on results of FY 14 Reviews Documentation Protecting the Government s Interest when Subcontracting with Contractors Debarred, Suspended, or Proposed for Debarment (FAR 52.209-6) Policies and Procedure Manual Cost/Price Analysis Sole Source Selection Justification Negotiations Training Limitation on Use of Appropriated Funds to Influence Certain Federal Contracting and Financial Transaction (Public Law 101-121) (Anti-Lobbying) Defense Priorities and Allocation System (DPAS) Rating (15 CRF Part 700(4)) Internal Review/Self Audit 10

Who Click decides to edit Master if a System title style is approved? Business System Determinations are made by Click ACOs to edit Master text styles And Second in some level case PCOs But Third not by level Business Operations Center personnel ACO decisions recorded in the DCMA Contractor Business Analysis Repository (CBAR) by CAGE Code As of 28 May 2015 21 Disapprovals 741 Approvals 42 Not Evaluated 11 3,661 Marked as N/A

Actions Click to edit post Master CPSR and title System style approval ACO Surveillance Performed Annually ACO performs annual surveillance IAW DCMA Second Inst. 109 of level a Contractor s purchasing system based Third on level criteria in DFARS 252.244-7001 for an acceptable purchasing system. The ACO» completes Fifth level a Risk Assessment and requests a CPSR Review when: Contractor s policy or practice in regards to their purchasing system criteria appear to not be in compliance with the FAR, DFARS, or public laws based on ACO surveillance, or Three years have passed after CPSR has been completed and the ACO has made a Final Determination for system approval. 12

Additional Click to edit functions Master title performed style by the CPSR Group Consent to Subcontract CPSR Group Desk Audits Advance notification and consent required if the Second prime does level not have an approved purchasing system and Government is assuming Fourth a large level portion of the contract risk DCMA Instruction 143 addresses Consent to Subcontract Established policies, assigns roles and responsibilities and outlines procedures for ACOs to gain insight into prime contractor s subcontracting actions ACO submits a request for support to the CPSR team Procurement Analyst reviews and provides recommendation Averaging 28 reviews per month for CY15 13

Click CPSR to Performance edit Master title and style Staffing Overview FY10 FY11 FY12 FY13 FY14 FY15 Risk Assessments 113 85 226 219 145 165 Eligible 100 66 100 105 107 126 Scheduled 97 66 70 118 126 143 Completed 78 40 43 57 103 111 (est) Carried Over 3 16 27 32 23 38 Authorized/Onboard 30/26 44/24 44/31 44/35 46/32 45/36 14

Click CPSR to Management edit Master Challenges title style Risk Assessments Received Larger number of reviews completed in FY10 resulted in decrease in RAs in FY11 In FY12 and FY13 the number of RAs sharply increased after the New Business System rule, 5/8/11 Number of Reviews performed has decreased while personnel has increased FY10 78 completed with 26 Procurement Analysts One Analyst performed a review in FY10 vs two analysts now Length of review increased (two weeks on average vs one week) and more in depth reviews performed now vs FY10 FY14 Goal was 125 reviews Completed 103 reviews FY 15 Estimated to complete 111 reviews 15

Click Priorities to edit as Master we look title ahead style Cycle Time Metric report issued in 30 days FY13 metric was 7% vs goal of 85% FY13 began at 300 days to complete, FY14 at 150, FY15 at 157 Oct 1, 2014 Fourth there level were 50 reports delinquent and May 28, 2015 there were 35 reports delinquent Close the system gap between review completion, report issued, and initial determination Personnel to support mission Counterfeit Parts policy implementation Better Buying Power Initiatives Critical Review of Cost/Price Analysis Sourcing without Competition 16

17 Click Recent to developments edit Master title affecting style CPSR Detection and Avoidance of Counterfeit Parts - Final Rule DFARS Case 2012-D055, Detection and Avoidance of Counterfeit Electronic Parts issued May 6, 2014 New DFARS 252.246-7007 clause, Contractor Counterfeit Electronic Parts Detection and Avoidance System Revised DFARS 252.244-7001, Contractor Purchasing System Administration to add counterfeit system criteria DFARS 231.205-71 revised to make the costs of counterfeit electronic parts or suspect» Fifth counterfeit level electronic parts and the cost of rework or corrective action that may be required to remedy the use or inclusion of such parts are unallowable, unless - The contractor has an operational system to detect and avoid counterfeit parts and suspect counterfeit electronic parts that has been reviewed and approved by DoD pursuant to 244.303; - The counterfeit electronic parts or suspect counterfeit electronic parts are Government-furnished property as defined in FAR 45.101; and - The contractor provides timely (i.e., within 60 days after the contractor becomes aware) notice to the Government DCMA Quality Assurance has been reviewing contractors counterfeit detection and avoidance systems since late 2012, this will continue with risk based surveillance and updated as required based on surveillance results. 17

Click Implementation to edit Master Status title style DCMA Instructions: Drafting Counterfeit Mitigation Instruction DCMA-INST 1205 --Quality Assurance will be broadening their surveillance to include all contracts and all potential counterfeit supplies, not just CAS covered contracts and electronic parts Updating CPSR DCMA-INST 109 on hold Other Actions: The CPSR Guidebook will be revised by Contracts to incorporate the policy changes Training provided to DCMA personnel New requirements and how to employ the DCMA Counterfeit Detection and Avoidance System Checklist To ensure understanding of possible remedies for deficiencies for Counterfeit Parts Detection and Avoidance Systems (Level II or III CAR, Disapproved Purchasing 18 System, System Withhold, etc.) 18

Click Industry to edit Outreach Master title style DCMA engaged in industry outreach to improve Counterfeit parts identification processes and issue awareness: Click to edit Master text styles Corporate Management Council (CMC) Council Second of Defense level and Space Industry Associations (CODSIA) National Fourth Contract level Management Association meetings Discussing current processes to address counterfeit parts and what additional actions may be needed Collaboration between DCMA and industry developing strategies to clarify elements and assessment criteria for: Leverage industry standards for counterfeit prevention DFARS/FAR rule implementation Counterfeit Electronic Part Avoidance and Detection System 19 SAE AS Standards on Counterfeit Mitigation 19

Click Property to edit Management Master title style Oversight Risk Assessments Click Based to on: edit Master text styles Contractor past performance Inherent risk (i.e. AA&E, classified items/data) Loss Investigations Third level Investigate reports of loss Relieve contractor or recommend liability to CO Ensure corrective actions taken to prevent recurrence Property Management System Analyses Audit contractor s property management system and determine whether procedures and controls comply with 52.245-1(F) Report findings to Contracting Officer (CO) Re-analyze corrective actions to ensure implementation 20

Property Click to Workload edit Master Trend title Indicator style FY 2010 2011 2012 2013 2014 2015 (Partial) # of Government Property (GP) Systems 3,492 2,882 1,850 2,130 2,131 2,413 GP Value $ 167.3 B $ 147.3 B $ 147.7 B $ 139.8 B $ 129.7 B $132.8 B GP Line Items 30.5 M 30.5 M 41.0 M 43.7 M 65.6 M 61.1 M Onboard/Authorized 208 205 183/185 182/197 174/201 170/199 Audits Performed 1075 1094 917 1026 1090 537 Audit Target 1113 1179 984 1121 1145 604 Complete % 97% 93% 93% 92% 95% 89% 21 21

Overall Click to Property edit Master Systems title style Status ACO decisions recorded in the Contract Property Administration System (CPAS) by CAGE Code Click 31 Disapprovals to edit Master text styles 1698 Approvals 95 Approvals with minor deficiencies Third (PA will level need to follow-up) 93 in pending Fourth level status Awaiting Contracting Officer Determination 21 pending ACO action with possible deficiencies (PA will need to follow-up) 317 Contractors awaiting initial audit 179 Contractors not evaluated Business System Determinations are made by Contracting Officers Majority of deficiencies: Poor procedures No flow down of clause requirements 22 22

Click What to is Our edit Plant Master Clearance title style Mission? Click to edit Master text styles Provide timely and cost effective reutilization, sale, and disposal of excess government property in the possession of contractors. Disposal includes ensuring property not reutilized is properly disposed to protect the safety and security of the United States and its citizens. 23

1 Click Plant to Clearance edit Master Workload title style Trend Indicator 7 Data as of 05/31/15 Acquisition Cost (Billions) 6 5 4 3 2 1 0 2011 2012 2013 2014 2015 FY 2011 2012 2013 2014 2015 (Partial) Acquisition Cost $3.93B $3.98B $4.81B $6.2B $4.16B Total Line Items 481K 584K 612K 716K 577K # Plant Clearance Cases 15,824 14,558 14,969 17,573 12,039 Authorized Personnel 68 68 76 76 76 24

1 Click to edit Master title style Plant Clearance Reutilization Click 43 to edit Master text styles Goal: 15% 38 33 28 23 Add property workload 18 13 slide $391M 8 2011 2012 2013 2014 2015 FY 2011 2012 2013 2014 2015 (Partial) Reutilization Percentage 16.3% 31.9% 17.7% 42% 26% Acquisition Cost- Usable $ 1.6B $ 1.9B $ 2.6B $3.1B $1.5B Reutilized Property $255M $621M $460M $1.3B $391M 25

Click What to is our edit Terminations Master title style mission? Negotiate equitable settlements of Click to edit Master text styles contracts terminated for the convenience of the Government Receive Fourth delegations level from all military services» worldwide Fifth level Perform cradle to grave settlement of the termination from receipt of the termination notice to issuance of the final settlement modifications Serve as the DoD technical experts for this field 26

Click Terminations to edit Master Workload title style 150 147 140 120 $ Millions 130 110 100 90 80 70 60 50 $12,231.0 Terminated Contract Value Onhand ($M) $35,497.0 $26,761.4 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 40 30 20 FTEs 27 $10,000 $5,000 10 0 FY92-Q1 FY92-Q4 FY93-Q3 FY94-Q2 FY95-Q1 FY95-Q4 FY96-Q3 FY97-Q2 FY98-Q1 FY98-Q4 FY99-Q3 FY00-Q2 FY01-Q1 FY01-Q4 FY02-Q3 FY03-Q2 FY04-Q1 FY04-Q4 FY05-Q3 FY06-Q2 FY07-Q1 FY07-Q4 FY08-Q3 FY09-Q2 FY10-Q1 FY10-Q4 FY11-Q3 FY12-Q2 FY13-Q1 FY13-Q4 FY14-Q3 FY15-Q2 $0 27

Click DCMA s to edit Business Master Operations title style Center Value added provider of three of the fifteen DCMA lines of service Supporting CCAS property and Plant Clearance mission Supporting achievement of the Better Buying Power initiatives Questions? 28

Click Contact to edit Information Master title style Andrew C. Obermeyer DCMA Business Operations Center andrew.obermeyer@dcma.mil Second level www.dcma.mil Karen Zinn DCMA CPSR Group Karen.zinn@dcma.mil www.dcma.mil 29