Refer to DFARS 215.407-5-70, Disclosure, maintenance, and review requirements, 215.407-5-70(g)(2)(vi) and (3). See also subpart 17.92.
(b)(91) Follow-up on contract audit reports.
(a) Responsibility of the chief of the contracting office. The contract follow-up official for DLA contracting offices (the Director, Acquisition Management, (J-7) ) has designated the chief of the contracting office as the official responsible for full and effective implementation of the requirements of DoDD 7640.2, Policy for Follow-up on Contract Audit Reports (http://www.dtic.mil/whs/directives/corres/html/76402.htm ). A local contract audit focal point (the cost/price analysis element, where one exists) shall be established to assist in discharging the tracking and reporting requirements of the Directive.
(b) Responsibilities of contracting officers.
(1) Promptly upon receipt of a contract audit report involving indirect cost rates, defective pricing, incurred costs, final pricing, terminations, claims, cost accounting standards, and reviews of a contractor's system the contracting officer shall furnish a copy of the report to the local contract audit followup focal point, and, if "reportable" (see DoDD 7640.2, paragraph F.3.), a detailed milestone plan for timely "resolution" and "disposition" . Updated milestone plans, reflecting the actual dates milestones were achieved and revised target dates, shall be forwarded to the local contract audit follow-up focal point at the time any milestone is achieved or missed.
(2) Contracting officers shall "resolve" any differences between their planned action and that recommended by the contract audit activity for all "reportable" audits. The contracting officer shall accomplish the required "resolution" promptly, and in no case later than 6 months following issuance of the audit report (P.L. 96-527). "Resolution" occurs upon approval obtained, in accordance with local review procedures, of the planned negotiation/settlement objectives.
(3) The contracting officer shall endeavor to accomplish disposition of all audit reports as soon as possible after "resolution." "Disposition" should normally occur within 12 months following audit report issuance. As stated in Enclosure 1 to DoDD 7640.2 a reportable audit is closed when "disposition" occurs, i.e.:
(i) The contractor implements the audit recommendations of the contracting officer's decision; or
(ii) The contracting officer negotiates a settlement with the contractor and a contractual document has been executed; or,
(iii) The contracting officer issues a final decision pursuant to the Disputes Clause, and 90 days elapse without contractor appeal to the Armed Services Board of Contract Appeals (ASBCA). (Should the contractor appeal to the Claims Court within the 12 months after final decision, the audit must be reinstated as an open report in litigation); or
(iv) A decision has been rendered on an appeal made to the ASBCA or U.S. Claims Court and any corrective actions directed by the Board or Court have been completed and a contractual document has been executed; or
(v) Audit reports have been superseded by, or incorporated into, a subsequent report; or
(vi) Any corrective actions deemed necessary by the contracting officer have been taken, so that no further actions can be reasonably anticipated.
(i) Upon completion of the "disposition" action, the contracting officer shall promptly furnish a memorandum of actions taken to the local contract audit follow-up focal point, the ACO, and to the auditor (DoDD 7640.2, paragraph F.5.a.).
(ii) When award does not result to the contractor whose offer was subject to a preaward audit report (due to cancellation, award to a competitor, etc.), the contracting officer shall promptly provide written notification to the local contract audit follow-up focal point, the ACO, to the auditor (DoDD 7640.2, paragraph F.5.b.).
(c) Responsibilities of contract audit follow-up focal points. The contract audit follow-up focal point is responsible for tracking and reporting the status of audit reports as specified below:
(1) Tracking every contract audit report, excluding "nonreportable audits," using milestone status information furnished by the contracting officer. The current status of each action is to be maintained in a log or similar document that includes all information required by the semiannual contract audit follow-up status report.
(2) Preparing the semiannual report spreadsheets of "open" and "closed" audits (formats in DoDD 7640.2) in MS Excel for submission by the chief of the contracting office and receipt in HQ DLA, ATTN: J-73, not later than 10 April and 10 October of each year, along with a current milestone chart on each open audit (see 15.406-3(b)(91)(c)1)). Negative reports are required. Electronically transmit a copy of the report spreadsheets to [email protected] .
