The acronym ACO as used in this
instruction could refer to either Corporate Administrative
Contracting Officer (CACO), Divisional Administrative
Contracting Officer (DACO) or Administrative Contracting
Officer unless specified otherwise.
For the special Programs
Directorate, the approval authority for actions herein
remains with the appropriate CMO Contracts director.
DACOs and CACOs assigned to the Special Programs Directorate
will not be realigned to the Cost and Pricing Center.
1. Issue Notice of Intent to Disallow Costs
(Incurred or Planned for Incurrence)
1.1. The ACO shall issue a notice of intent to
disallow costs to cost-reimbursement contracts, the cost-reimbursement
portion of fixed-price contracts, letter contracts that provide for
reimbursement of costs, and time-and-material and labor-hour contracts. as
early as practicable during contract performance if the ACO believes a cost
is unallowable under the contract terms (FAR
42.801).
1.2. The ACO shall make reasonable efforts to get
the contractor to agree that the cost is unallowable. If the ACO and
the contractor do not agree on the allowability of the costs, the ACO shall
issue a notice of intent to disallow the costs (FAR
42.801).
1.2.1. The notice of
intent shall (FAR
42.801(c)):
1.2.1.1. Refer to the contract's Notice of Intent to Disallow Costs
clause.
1.2.1.2. State the contractor's name and list the numbers of the
affected contracts.
1.2.1.3.
Describe the costs to be disallowed, including estimated dollar value by
item and applicable time periods, and state the reasons for the intended
disallowance.
1.2.1.4.
Describe the potential impact on billing rates and forward pricing rate
agreements.
1.2.1.5.
State the notice's effective date and the date the contractor must provide a
written response.
1.2.1.6.
List the recipients of copies of the notice.
1.2.1.7.
Request the contractor to acknowledge receipt of the notice.
1.3. (ND) Before issuing the notice of intent to disallow costs, the ACO shall obtain
approval of the notice from the CMO Contracts Director and any required
Contract Management Board of Review. LATEST CHANGE Before issuing the notice of intent to disallow costs,
CACOs and DACOs shall obtain approval of the notice from the Director of
Corporate/Divisional Administrative Contracting Officer Group. If this action is delegated, the CMO Contracts Director must delegate to a
level no lower than the contract team supervisor/leader. 1.4. The ACO shall furnish copies of the notice to the CACO and
all cognizant DACOs (FAR
42.801(d)).
1.5. If the notice involves elements of indirect
costs, the ACO shall coordinate with the ACO and cognizant DCAA office
responsible for settling the final indirect cost rates (FAR
42.801(e)).
1.6. If the contractor submits a written response
that the contractor disagrees with the notice within the time period
specified in 1.2.1.5. above, the ACO shall withdraw the notice or issue a
final decision (FAR
42.801(f)).
1.6.1. If the costs are
indirect costs, the ACO responsible for settling the final indirect cost
rates must resolve the notice (FAR
42.801(f)). 1.6.2. (ND)
The ACO shall document in a memorandum for record to the contract file an
affirmative statement that the ACO agreed or disagreed with each audit
finding and recommendation and sound rationale for resolving each audit
finding and recommendation. The rationale must demonstrate that the
ACO has considered all appropriate FAR, DFARS, and DCMA Instructions related
to the issues raised or questioned by DCAA.
1.7. (ND) LATEST CHANGE The ACO shall
obtain approval from the CMO Contracts Director, and CACOs and DACOs shall
obtain approval from the Director of Corporate/Divisional Administrative
Contracting Officer Group, and also the approval of any required Contract
Management Board of Review, before withdrawing the notice or executing a
final decision. If this action is delegated, the CMO Contracts
Director must delegate to a level no lower than the contract team
supervisor/leader. LATEST CHANGE The ACO and the CMO Contracts
Director, CACOs, DACOs and the Director of Corporate/Divisional Administrative
Contracting Officer Group, should ensure that, in preparing the
Contracting Officer Final Decision, advice is obtained from assigned legal
counsel, the Contract Disputes Resolution Center (CDRC) and other advisors
in accordance with DCMA Contract Claims and Disputes Instruction.
2.1. DCAA has sole responsibility for approving
interim vouchers for provisional payment (this includes approving the fee
portion of vouchers in accordance with the contract schedule and ACO
instructions) and sending them to DFAS or other payment office. As
part of that responsibility, DCAA is responsible for issuing DCAA Form 1,
Notice of Contract Costs Suspended and/or Disapproved when allowability of
the costs billed in the interim vouchers is questionable (DFARS
242.803(b)(i)). DCAA's policies and procedures for disallowing
costs are at DCAAM 7640.1, 6-900. 2.2. The ACO can also issue or direct issuance
of a DCAA Form 1 on any cost where the ACO has reason to suspend or disallow
the costs (DFARS
242.803(b)(ii)). 2.3. Except as provided in paragraph 2.4. below, when DCAA issues a DCAA Form 1:
2.3.1. The ACO shall take
no action unless the contractor (FAR
42.803(b)(3)):
2.3.1.1.
Submits a written request to the ACO to consider whether the unreimbursed
costs should be paid, or
2.3.1.2. Files a claim under the Disputes clause.
2.3.2. (ND)
If the contractor submits a written request asking the ACO to determine
whether the unreimbursed costs should be paid or files a claim under the
Disputes clause, the ACO shall:
2.3.2.1. (ND) Fully consider all DCAA findings and
recommendations.
2.3.2.2.
Make a written determination and withdraw the notice within 60 days if the
ACO finds that the costs should be paid (citation identification pending),
or
2.3.2.3. Issue the final decision within the following statutory
timelines (FAR
33.211(c)):
2.3.2.3.1. For claims of $100,000 or less, 60 days after receiving a
written request from the contractor that a decision be rendered within 60
days, or within a reasonable time after receipt of the written request or
claim.
2.3.2.3.2. For claims over $100,000, 60 days after receiving a
certified claim. It the ACO determined that the final decision cannot
be issued within 60 days, the ACO shall notify the contractor within 60
days, of the date the decision will be issued.
2.3.2.4. (ND) Document in a memorandum for record to the contract file
an affirmative statement that the ACO agreed or disagreed with each audit
finding and recommendation and sound rationale for resolving each audit
finding and recommendation. The rationale must demonstrate that the
ACO has considered all appropriate FAR, DFARS, and DCMA Instructions related
to the issues raised or questioned by DCAA. 2.3.2.5. (ND) Obtain approval from the CMO Contracts Director,
and any required Contract Management Board of Review (BoR) before making the
notice of withdrawal or final decision. LATEST CHANGE CACOs and DACOs shall obtain approval from the
Director of Corporate/Divisional Administrative Contracting Officer Group,
and any required Contract Management BoR before making the notice of
withdrawal or final decision. If this action is delegated, the
CMO Contracts Director must delegate to a level no lower than the contract
team supervisor/leader. LATEST CHANGE The ACO and the CMO Contracts
Director, or Director of Corporate/Divisional
Administrative Contracting Officer Group, shall ensure that, in
preparing the Contracting Officer Final Decision, advice is obtained from
assigned legal counsel, the Contract Disputes Resolution Center (CDRC) and
other advisors in accordance with DCMA Contract Claims and Disputes
Instruction.
2.3.2.6. (ND) Not take any action to allow the contractor to
be paid for the costs suspended or disallowed by DCAA prior to withdrawing
the notice or issuing the final decision.
2.3.2.7. (ND) If the ACO will not be able to render a decision
within 60 days:
2.3.2.7.1. LATEST CHANGE The ACO shall immediately
establish target dates for required actions to support the final decision
(e.g., additional inputs from DCAA, required legal counsel reviews) and the
target date for making the decision and provide the schedule to the CMO
Contracts Director, or Director of
Corporate/Divisional Administrative Contracting Officer Group, as applicable.
2.3.2.7.2. LATEST CHANGE The
CMO Contracts Director, or Director of Corporate/Divisional Administrative
Contracting Officer Group, as applicable, shall approve the schedule
and ensure the schedule meets the statutory timelines in 2.3.2.2.
2.3.2.7.3. The ACO shall provide a copy of the approved schedule to
the contractor.
2.4.(ND) Auditor Determined Final Indirect Cost Rates. If DCAA issues
a DCAA Form 1 on final indirect cost rates that are subject to the auditor
determination procedures at FAR 42.705-2, the ACO shall follow the procedures in the Final Overhead
Rates Instruction.
Competencies/Certifications
ACO will be warranted and DAWIA certified in accordance with the
position held.
Training Matrix
Disallowance of
Costs Training Matrix
What
TASKS are
required to
accomplish this
process?
Methods
of training
On-the-Job
Training (OJT)
Computer
Based Training (CBT)
Course
(Commercial, College/ Vocational)
Contractor
Sponsored Training
Guidebooks
DCMA
Developed
Administrative Task (The task is wholly enabled by the
contents of the instruction and requires no training intervention)