defense contract management agency -...
TRANSCRIPT
-
Defense Contract Management Agency
Presented By:
Mr. Timothy Callahan
Executive Director of Contracts, DCMA
19 June 2014
Proprietary and Confidential
-
Agenda
DCMA Mission, Scope and Authorities
Strategic Plan FY14/15 Priorities
Affordability
Audit Readiness
Contract Administration
Cost Recovery Initiative
Business Systems
Cost and Pricing
Forward Pricing Rate Agreements
CACP/DACO Re-alignment
Small Business
Workforce Development
2
Proprietary and Confidential
-
3
Mission
We provide Contract Administration Services to the Department of Defense
Acquisition Enterprise and its partners to ensure delivery of quality products and
services to the warfighter; on time and on cost.
Vision
DODs leading experts in Quality Assurance; Cost, Schedule, and Supply Chain
Predictability; and Contract Administration; enabling our partners to achieve
contract objectives.
Values
Integrity Committed to the highest standards of ethical and moral behavior at all times.
Service Working for the benefit of our nation and putting professional responsibilities
before self-interests.
Excellence Committed to exceptional performance in everything we do.
DCMA Mission, Vision, and Values
Proprietary and Confidential
-
DCMA is a Team Member In the Defense Acquisition Community
4
Under Secretary
of Defense (AT&L)
DCMA
Chairman
Joint Chief of Staff
Secretary of Defense
Assistant
Secretary of Defense
(Acquisition)
Historical Perspective Service PROs/DCAS to DLA (1990) to DCMA (2000)
Buying Commands
Combat Support Agency
Army
Navy
Air Force
Marines
Contract Administration DLA
Proprietary and Confidential
-
Aircraft
Operations
CAPT Drew
Swenson
Engineering
& Analysis
Ms. Karron
Small
Financial &
Business
Operations
Ms. Pamela
Conklin
Contracts
Mr. Timothy
Callahan
Quality
Assurance
Mr. Michael
Shields
Portfolio
Management
& Integration
Mr. Joseph
Sweeney
Information
Technology
Mr. Jacob
Haynes
Chief Operating Officer
Ms. Marie Greening
Corporate
Support
Mr. Martin
Jakim
Organizational Chart
General
Counsel
Ms. Sharron
Philo
Current as of 6/6/21/14
Director
Lt. Gen. Masiello
International
RDML Deborah Haven
Special Programs
Mr. James Norris
Equal Opportunity
Dr. Larry Ross
Chief of Staff
Col Steven Buetow
Sr. Enlisted Advisor
CMSgt Rita Green
Human
Capital
Ms. Kathleen
Butera
Independent Assessment
Ms. Diana Graff
Diversity and Inclusion
Mr. George Braxton
Mobilization Assistant
Brig Gen Wade Smith
Proprietary and Confidential
-
6
Worldwide Acquisition Impact
DCMA Eastern Region:
Headquarters Boston, MA
Contract Management Offices:
Atlanta, GA
Baltimore, MD
Boeing, Philadelphia, PA
Boston, MA
Garden City, NY
Hartford, CT
Lockheed Martin, Marietta, GA
Lockheed Martin, Moorestown, NJ
Lockheed Martin, Orlando, FL
Manassas, VA
Orlando, FL
Philadelphia, PA
Raytheon, Tewksbury, MA
Sikorsky Aircraft, Stratford, CT
Springfield, NJ
APO (Aircraft Propulsion Operations),
Hartford, CT
NESO (Naval Special Emphasis
Operations), Philadelphia, PA
DCMA Central Region:
Headquarters Chicago, IL
Contract Management Offices:
Bell Helicopter, Forth Worth, TX
Boeing, St. Louis, MO
Chicago, IL
Dallas, TX
Dayton, OH
Detroit, MI
Huntsville, AL
Lockheed Martin, Forth Worth, TX
Twin Cities, MN
AIMO (Aircraft Integrated Maintenance
Operations), St. Augustine, FL
DCMA Western Region:
Headquarters Carson, CA
Contract Management Offices:
Boeing Huntington Beach, CA
Denver, CO
Lathrop, CA
Lockheed Martin Denver, CO
Lockheed Martin Sunnyvale, CA
Los Angeles, CA
Palmdale, CA
Phoenix, AZ
Raytheon, Tucson, AZ
Santa Ana, CA
NPO (NASA Product Operations),
Fort Sam Houston, TX
International Contract Management Offices:
DCMA Americas Ottawa, Canada
DCMA Northern Europe RAF Wyton, United Kingdom
*DCMA Southern Europe Wiesbaden, Germany
*DCMA Middle East Kuwait City, Kuwait
*DCMA Afghanistan Kabul, Afghanistan
DCMA Pacific Atsugi, Japan
* Includes Contingency Contract Administration (CCAS) Operations
DCMA Headquarters
Fort Lee, VA
Regional Headquarters
International CMOs
Special Programs
DCMA Special Programs
Special Programs East
Special Programs South
Special Programs West
Proprietary and Confidential
-
7
Total Contract Amount 6,577.5B
Obligated Amount $1,860B
Active Contractors 20,001
Active Contracts 347.6K
Unliquidated Obligations Amount $223B
ACAT I (IAC, IC, ID) and II Programs 193
Aircraft per Year (FY13) 1,569
Flying Hours (FY13) 20,516
Government Property Value $155.6B
Progress Payments $15.6B
Performance-based Payments $15.7B
SCOPE
of
WORK
Civilians On-board 11,441
Military (Active Duty - 429), (Reserve - 119) 548
Operational Directorates 3
Locations 740+
Contract Management Offices 47
Budget Authority $1.35B
Reimbursable Target $125.5M
SPAN
of
CONTROL
Scope of Work and Span of Control Data for 1QFY14
Proprietary and Confidential
-
Quality Assurance Svcs (34%) Contract Admin Support & Services (20%)
Engineering & Manufacturing Svcs (17%) Cost & Pricing Svcs (12%)
Major Program Support (5%) Earned Value Management (3%)
Property Mgmt & Plant Clearance Svcs (3%) Transportation Svcs (2%)
Aircraft Operations Svcs (1%) Supply Chain Support (1%)
Industrial Base Analysis Svcs (1%) Contractor Purchasing Sys Reviews (1%)
Small Business Support (1%) Contract Safety Services (1%)
Contract Termination Svcs (
-
Contracts Directorate (DCMA-AQ)
Operations Support
Budget JERRY KOTVASZ (804) 734-0458
Exec Services BEN KELLEY (804) 734-0461
Personnel JIM LEROY (804) 734-0471
Executive Director
TIMOTHY P. CALLAHAN (804) 734-0500
Deputy Executive Director
SALLEE JUSTIS (804) 734-0501
Executive Assistant
CINDY ROBINSON (804) 734-0657
Business Ops Center AQB
ANDREW OBERMEYER
(804) 734-0494
CPSR Group AQBC
KAREN ZINN
(214) 670-9351
Plant Clearance Group AQBP
KATHERINE BURKE
(617) 753-3130
Terminations Group AQBT
PAUL SLEMONS
(678) 503-6351
Property Group AQBY
CYNTHIA THRAILKILL
(937) 656-3154
CMO Contracts Director DCMAO
LEONA FITZPATRICK
(804) 416-9079
Int Contracts Director DCMAI
CAT IGNACIO
(804) 734-1148
SP Contracts Director DCMAS
KATHLEEN MILLER
(804) 734-0156
Cost & Pricing Center AQK
RON YOUNGS
(703) 530-3675
PA, FP, & IC Group AQKA
STEVE TRAUTWEIN
(703) 530-3203
DA, T, & R Group AQKC
MICHAEL PAULINI
(224) 625-9171
CACO\DACO Group AQKD
SEAYANNE SHELEY
(617) 753-3407
Financial Cap Group AQKF
PAUL REUBEN
(703) 530-3249
CIPR Team AQKDO
GEORGE MATRAY
(718) 354-3767
DAR Council AQCD
TOM RUCKDASCHEL (ACTING)
(804) 734-0505
Contracts Policy Division AQC
STACY STRICKLAND
(804) 734-0488
Property Branch AQCP
TOM RUCKDASCHEL
(804) 734-0505
Finance & Payment Branch AQCF
MARY SHERIDAN
(804) 734-2458
Plan & Perf Assess Division AQA
WENDY LAUGHLIN
(804) 734-1515
Small Business Center AQSC
TATIA EVELYN-BELLAMY
(804) 734-0506
Small Business Division AQS
TATIA EVELYN-BELLAMY
(804) 734-0506
Procurement Division AQP
TARA PETERSEN
(804) 734-0487
Procurement Center AQPW
AMANDA PARKER
(804) 734-1534
Cost & Pricing Policy Division AQD
JOAN SHERWOOD
(804) 734-0480
Bus Proc, Ana, & Dev Division AQI
KEVIN CONNEEN
(804) 734-0483
FIRM Center AQII
SHAWN MAPEL
(804) 734-0482
As of 20140521
Proprietary and Confidential
-
Strategic Management Plan FY14/15
Proprietary and Confidential
-
11
11
Priorities for 2014 Support On-going Operations
Achieve Affordable Programs
Improve Efficiency
Strengthen Industrial Base
Strengthen the Professionalism of the Acquisition
Workforce
Protect the Future
There will be a Better Buying Power 3.0
USD AT&L Priorities
Proprietary and Confidential
https://home.dcma.mil/express/headlines/2012/041812.cfm
-
DCMA Strategic Management Plan FY14-15
10 Business Priorities each
with supporting goals
Organized by the balanced
scorecard:
Acquisition Enterprise
Policy & Processes
Human Capital
Stewardship
Focused more on shorter term
goals than the multi-year plan
FY14-FY15 Execution plan
published
Business Priorities:
1. Affordability
2. Predictability
3. Reliability
4. Business Process Engineering
5. Recruit
6. Hire
7. Develop
8. Retain
9. Internal Audit Readiness
10. Audit Readiness Service
Provider
Proprietary and Confidential
-
Business Priority: Affordability
Alignment: Acquisition Enterprise
Enhance DoD buying power by increasing affordability
Six supporting goals:
Establish an Agency-wide capability to support timely reviews of Disclosure Statement
revisions
Support enterprise pricing with the expertise of the Integrated Cost Analysis Teams
(ICAT) and improving/expanding efforts on Should Cost Reviews
Improve and expand efforts from the CACO/DACO/Cost Monitors on forward pricing
and Boards of Review
Enhance the real time information for rates/business systems status in Contract
Business Analysis Repository (CBAR)
Reduce the backlog of overage accounting issues and final overheads to enable timely
settlement of contract cost entitlements
Support the Service Acquisition Review Board (SARB) initiatives to improve the
tradecraft in acquisition of services
13
Goal Leader: Contracts Directorate Proprietary and Confidential
-
Business Priority: Audit Readiness Service Provider
Alignment: Stewardship
Support our DoD customers in their efforts to attain and sustain a
clean audit opinion on their financial statements
Four Supporting Goals:
Assert audit readiness to OSD FIAR Directorate
Assert audit readiness to DoD customers for which DCMA is Contract Pay Service
Provider
Complete initial Statement on Standards for Attestation Engagements (SSAE No. 16)
examination
Complete final Statement on Standards for Attestation Engagements (SSAE No. 16)
examination
Proprietary and Confidential
-
DoD Mandate to Improve Financial Management and Auditability
15
Proprietary and Confidential
-
Service Provider
Reporting Entity:
(appropriated budget)
Service Provider:
(stewardship of delegated funds)
DCMA is pursuing a single audit opinion to preclude audits by each RE Customer
SSAE #16 - Reporting on Controls at a Service Organization
DCMA USAF Navy
Department of Defense
DCMA - Contract Pay
Army ODOs*
* Other Defense Organizations
Proprietary and Confidential
-
Process / System Mapping
Events with Financial Statement impacts - Outcomes
Obligations (new, modified, close-out)
Accruals (receipt/acceptance without invoice)
Payables (receipt/acceptance with invoice)
Disbursements (outlay)
Receivables (recoupment/demands)
Will also require asserting to systems
in which the work is performed
MOCAS
WAWF
e Tools
GAO Federal Information System Controls Audit Manual
(FISCAM) Proprietary and Confidential
-
Contract Pay End-to-End Process
(DCMA SSAE No. 16 Scope)
Invoice
Entitlement Pre-Validation
Disbursing &
Posting
Expenditure
Receipt &
Acceptance Commitment &
Obligation
Reconciliation
& Contract
Closeout
Reporting &
Accounting
Pro
ce
ss
Sub
-Pro
ce
ss
Distribute
Funding
**
Purchase
Requisition
**
Receive &
Obligate
Funding
00
Contract Input
00
Issue Orders &
Adjustments 00
Contract Award
**
Validate Funds
**
Receive/Accept
Goods/Srvcs at
Destination
**
Resolve
Payment
Discrepancies
**
Commercial
Invoices
00
Funds
Reconciliation-
MOCAS
00
Erroneous
Payment Check
00
Calculate EOM
Accrual
00
Disallow Costs
00
Receive/Accept
Goods/Srvcs at
Source
00
Deobligate
Excess/
Remaining
Funds
00
Full Termination
Settlement
00
Partial
Termination
Settlement
00 Funds
Reconciliation-
Component
**
GL Posting
**
Demand/
Recoup Funds
**
Contract
Financing
00
Contract
Closeout
00
Invoice
Processing
00
Validate Inputs
& Funding
00
Notice of Last
Action Process
**
DCAA
DFAS Component
DCMA
SSAE No. 16
Treasury
Reporting
**
EOM Reporting
**
Research &
Resolve
NULOs/UMDs **
Tri-Annual
Review
**
GL Posting
**
Commitments &
Obligations **
EOM Accrual
GL Posting &
Reversal **
EOM Payable
GL Posting **
Disbursements/
Expenditures **
Adjustments
**
Planned
Disbursement
Matched to
Recorded
Obligation 00
Payment
Authorization
00
Authorize
Disbursement
Processing 00
Erroneous
Payment Check
00
Certification &
Balancing
00
Erroneous
Payment Check
00
Payment File
Generation &
Release 00
Calculate EOM
Payable
00
Debt
Management
00
Disbursing
Reporting &
Reconciliation
00
Financial
Reporting
**
Proprietary and Confidential
-
Sound processes that:
have detecting and preventive controls (properly designed)
produce the expected outcome (operating effectively)
are documented and have evidence of execution
(properly posted)
Result: an unqualified audit
and a state of audit readiness
1
9
End Result
Proprietary and Confidential
-
Contract Administration Services
Proprietary and Confidential
-
Contract Administration & Support Services
Mission
Provide contract administration support and
advice on all contract related matters and
improve the overall contracting mission.
Functions
Provide pre-award support
Identify potential performance risks
throughout the entire lifecycle of the contract
Support contract negotiations
Negotiate and execute ACO mods
Monitor contract performance
Review and process progress payments,
vouchers, and invoices
Contract closeout
Cost Accounting Standards compliance
Resolve contract disputes
Impact $15.6B in progress payments managed (1Q14)
$15.7B in performance based payments (1Q14)
579,614 closed in FY13
21
Proprietary and Confidential
-
Impact of Disapproved Business Systems and Inadequate Disclosure Statements
Business Systems
FAR Parts 9 and 16 address contractor responsibility and business systems adherence necessary to perform government contracts
Key Business Systems include: Accounting, Material Management Accounting Systems, Estimating, Earned Value Management, Purchasing, Property
To be determined responsible, a prospective contractor must have the necessary organization, experience, accounting, operational controls, and technical skills, or the ability to obtain them
FAR 16.301-3 Limitations A cost-reimbursement contract may be used only when the contractors accounting
system is adequate for determining costs applicable to the contract or order
Disclosure Statements
Contracting officers shall not award a CAS-covered contract until a written determination that Disclosure Statement is adequate unless waived by head of Agency
22
DCMA approves/disapproves Proprietary and Confidential
-
Business Systems
DFARS CBS Timelines
10 days for determination after receipt of audit/functional specialist report
Initial determination if one or more significant deficiencies
Final determination if no significant deficiencies
30 days for contractor response to initial determination
30 days for final determination after receipt of contractors response
Legacy determinations and reports
Reports dated prior to May 18, 2011
Findings may or may not be considered significant deficiencies under the new rule
Policy included in DCMA-INST 131, CBS
Procedures for addressing legacy determinations and issuing final determinations
Business system status guidelines Approved, Disapproved, Not Evaluated, & Not Applicable
Not Evaluated systems in the Contract Business Analysis Repository (CBAR) eTool
Aug 2012 Sep 2013 Apr 2014
2875
2
3
993 692 Proprietary and Confidential
-
Business System Rule
24
Contractor Business Systems must provide reliable information for decision making (FY2011 NDAA)
Interim Rule - 18 May 2011; Final Rule - 24 Feb 2012
Rule covers six contractor business systems
Challenge is consistent and timely determinations Business System Review Panel for proposed disapprovals Timeliness Standards established in Policy
System Disapprovals (count of CAGES)
Withhold
Accounting 51 $36.2 M
Estimating 13 $12.6 M
Earned Value Management 13 $95.2 M
Material Management and Accounting 0 $0
Property 17 $25.0 M
Purchasing 17 $0.6 M
Total 111 $169.6 M
Proprietary and Confidential
-
25
25
Significant Shift in Subcontract Content of Major Programs 20 years ago Prime was 70-80% and Subs were 20-30% Today Primes are 20-30% and Subs are 70-80%
Supply Chain Management Concerns Single Points of Failure Detection and Avoidance of Counterfeit Parts Specialty Metals Sourcing Contractor Purchasing System Reviews
Cost and Pricing Issues
Privity of Contract and Proprietary Information Audit Access and Field Pricing Support Commercial Item Determinations and Pricing
Subcontract Management
Proprietary and Confidential
https://home.dcma.mil/express/headlines/2012/041812.cfm
-
Cost and Pricing Services
Proprietary and Confidential
-
Cost and Pricing Services
27
Mission
Establish the right price for Department
Requirements
Functions Provide field pricing assistance
Establish forward pricing and final indirect rates
Monitor contractor indirect costs
Perform overhead should cost reviews
Provide support to negotiations
Provide specialized support (pensions, financial
capability reviews and commercial pricing)
Maintain Contract Business Analysis Repository
(CBAR) for DoD
Impact 11,390 Field Pricing Support cases - CY13
4,000 negotiations - CY13
690 Contractor Sites with FPRA/FPRR
3 Overhead Should Cost reviews - CY13
992 Financial Capability Reviews CY 13
Proprietary and Confidential
-
28 Proprietary and Confidential
-
Cost and Pricing
29
Successes: Enterprise cost & pricing capability yielded in excess of $6B in cost recovery, savings,
and/or avoidance
Conducted deep-dive overhead should cost reviews & provided mobile proposal
pricing/surge support
Closed 656 (out of 705) aging CAS issues with costs demanded or negotiated of
$787,933,347
Implemented policy change requiring DCMA to review disclosure statement changes
(vice DCAA)
Developed and implemented plan requiring CMOs to hold Stand Down Days with
DCAA to settle final overheads prior to the statute of limitations
Hot Topics: Significant volume of aging disclosure statement submissions, final overheads and
CAS non-compliances
Executive compensation ceiling changes will increase complexity and number of
forward pricing and final rates proposals
Budget uncertainty continues to complicate forward pricing rate forecasting
Proprietary and Confidential
-
Small Business Support
Proprietary and Confidential
-
31
31
Mission
Foster business innovation, new
technology, and promote private enterprise
Functions
Conduct subcontracting plan reviews at large
businesses with contracts over $650K
Provide analysis and recommendations on
subcontracting plans at contract award
Provide analysis and recommendations on
commercial plans and ensuing reports
Negotiate Master Subcontracting Plans
Negotiate and manage Comprehensive Plans
under the DOD test program
Review prime contractors mentor-protg
agreements, track progress, and develop ROI
report for Congress
Conduct reviews of Procurement Technical
Assistance Centers (PTAC)
Impact
83 Mentor Protg agreements ($56M)
resulting in 1,250 jobs created
63 PTACs provide basic assistance to
small businesses in marketing to
government
Small Business Support
Proprietary and Confidential
https://home.dcma.mil/express/headlines/2012/041812.cfm
-
Comprehensive Small Business Subcontracting Program (CSP)
DoD Test Program for Negotiation of Comprehensive Small
Business Subcontracting Plans ends December 31, 2014
DCMAs Role:
Negotiates annual CSPs on behalf of DoD in coordination with Departments and
Agencies
12 contractors with over 8,000 individual contracts
Transition Plan needs to be developed
Possible migration to use of Master Subcontracting Plans
National Defense Authorization Act
House Extend 3 Years Improve Data Analysis
Senate Extend to 30 Sep 2015 Increase Opportunities
32
Proprietary and Confidential
-
Workforce Development
Proprietary and Confidential
-
34
34
BRAC 2005 moved DCMA Headquarters to Fort Lee Move completed by September 2011 Less than 25% of DCMA staff made the move Headquarters functions and support impacted
HQ budget being reduced by 20% by FY2019 per SECDEF Attrition of 600 to 800 employees per year
50% of workforce has less than 5 years with DCMA Workforce Competency Not just a DCMA issue
DPAP will be conducting a Competency Assessment DCMA conducting in-house training DAU stood up College of Contract Management
Contracting Officer Warranting Process
CORB Contracting Officer Review Board COAT Contracting Officer Assessment Tool
DCMA Workforce
Proprietary and Confidential
https://home.dcma.mil/express/headlines/2012/041812.cfm
-
LEVEL II AQ Course Status With CCM
-CACO/DACO Duties -TCO Duties -Property Officer Duties -Plant Clearance Officer Duties
Job Task & Gap Analysis
Course Release
Course Analysis
Course Development
Course Pilot
AQ Functional Community Training Infrastructure Development
CMC 100 (Intro to Contract Administration) CMC 200 (Contract Financing) CMC 210 (Contract Closeout) CMC 220 (Advanced Contract Administration) CMC 230 (ACO Business Fundamentals) CMC 240 (Cost Accounting Standards) CMP 200 (Integrated Cost Proposal Evaluation) CMP 210 (Cost Monitoring) CMP 220 (Cost Accounting Standards) CMP XXX (Development of Indirect Rates)
Legend Green Mission tasks/KSAs, Learning Objectives provide training roadmap Purple Completed CCM tasks, not yet funded for Course Development Blue On contract with CCM Red FY14 work contracted/planned for CCM contract Black Transitioned to DAU/CCM complete
35
Estimate Incremental Launch of Pilots in 2nd Qtr FY15
Estimate Late FY15
Proprietary and Confidential
-
36
How to Find Us (www.dcma.mil)
Policies
HQ, Regions
& CMOs
CAS Directory
CMT Finder
E-Tools
Access
Proprietary and Confidential
-
3
7
Questions
Proprietary and Confidential
-
Contact Us
Tysons, VA 8000 Towers Crescent Drive Suite 950 Tysons, VA 22182 P: 703.761.4848
Bethesda, MD 6720-B Rockledge Drive Suite 750 Bethesda, MD 20817 P: 301.654.7555
Annapolis, MD 888 Bestgate Road Suite 401 Annapolis, MD 21401 P: 410.571.7766
Herndon, VA 13665 Dulles Technology Drive Suite 220 Herndon, VA 20171 P: 703.885.8190
www.watkinsmeegan.com
Proprietary and Confidential
-
Presenters
Timothy Callahan, Executive Director of Contracts Defense Contract Management Agency
[email protected] 804.734.0500
Proprietary and Confidential
mailto:[email protected]