# AFARS PART 5142

- 5142.1-90 -- Follow-up on contract audit reports.

- 5142.1-90-1 -- Responsibilities.
- 5142.1-90-2 -- Tracking of contract audit report recommendations.
- 5142.490-3 -- Reporting.
- 5142.490-4 -- Overage Audit Review Boards.

- Subpart 5142.15 -- Contractor Performance Information

- 5142.1502-90 Policy.
- 5142.1503-90 Procedures.

AFARS -- Part 5142
Contract Administration and Audit Services

5142.1-90 -- Follow-up on contract audit reports.

5142.1-90-1 -- Responsibilities.

(a) The Army Contracting and Transformation Enterprise Systems Directorate, SAAL-PX, Deputy Assistant Secretary of the Army for Procurement, is the Army’s contract audit follow-up official.

(b) Principal Assistant Responsible for Contracting (PARC) must perform the functions of the Army’s contract audit follow-up official for their respective commands. PARCs must --

(1) Establish Overage Audit Review Boards;

(2) Ensure that the effective resolution and disposition of audit findings and recommendations in a timely manner while fully protecting the Government’s interests is a factor in organizational and individual performance standards and objectives; and

(3) Maintain close surveillance of all contract audit reports, resolve, and dispose of any audit reported.

(c) Chiefs of contracting or contract administration offices must track and assist contracting officers in the resolution and disposition of those audit recommendations which appear unlikely to be resolved within six months of the date of an audit report.

(d) Contracting officers must --

(1) Resolve the recommendations as described in DOD Instruction (DODI) 7640.02 not later than six months from the date of the audit report and dispose of those recommendations within 12 months; [AFARS Revision #25, Item XX, dated April 1, 2010]

(2) Invite the auditor to participate in the review when it is considered necessary; and

(3) Appear before the Overage Audit Review Board to discuss the resolution and disposition of any audit reported in accordance with 5142.490-4(c).

[AFARS Revision #21, dated May 22, 2007]

5142.1-90-2 -- Tracking of contract audit report recommendations.

(a) Centrally track all contract audit reports from request for audit through receipt, resolution and disposition. Each contracting or contract administration office, including satellite offices such as Government-owned contractor-operated (GOCO), shall establish a single entity for requesting, receiving and tracking all audit reports. Provide the activity name, address, attention symbol, point of contact and telephone number of the single entity to the contract administration services office and Defense Contract Audit Agency (DCAA) regions involved.

(b) Centrally track and report audit report data in accordance with DoD Directive (DODD) 7640.2. Maintain a file for each audit report and include in each file the following information:

(1) Report number.
(2) Activity address number.
(3) Issuing agency.
(4) Date of report.
(5) Contractor.
(6) Contract number(s).
(7) Organization responsible for disposition.
(8) Contracting officer responsible for disposition.
(9) Total amount subjected to audit.
(10) Total questioned costs.

(c) For reportable audit reports, the central files shall also include the following information:

(1) Type(s) of recommendations contained in report. Use the codes in DoDD 7640.2.

(2) Target date of resolution.

(3) Actual date of resolution.

(4) Target date for disposition.

(5) Date of final decision (if any) of contracting officer.

(6) Date of filing with Armed Services Board of Contract Appeals (ASBCA) or court (if any) and docket or case number.

(7) Disposition results in terms of questioned costs sustained.

5142.490-3 -- Reporting.

The Status Report on Specified Contract Audit Reports (RCS DD-IG (SA)1580), as required by DoDI 7640.2, shall be submitted by each contracting or contract administration office to reach the addressee at 5101.290(b)(6), Attn: CAFU, not later than 15 April and 15 October of each year. Use the Army Contract Audit Follow-up Automated Program for the status report. Obtain the program and instructions from the addressee at 5101.290(b)(5). Negative reports are required.

[AFARS Revision #21, dated May 22, 2007]

5142.490-4 -- Overage Audit Review Boards.

(a) Make every effort to resolve audit recommendations within six months of the date of an audit report and dispose of them within 12 months. Each PARC shall establish and chair an Overage Audit Review Board (the Board) to review the status of open audits reported as overage or unresolved on the Status Report on Specified Contract Audit Reports.

(1) The PARC shall chair the Board. The Board shall:

(i) Be composed of the contracting activity’s senior legal, contracting, and pricing personnel.

(ii) Review all open, unresolved audits over six months old and resolved audits over 12 months old that are reported as open on the most recent Status Report on Specified Contract Audit Reports.

(iii) Meet early in November to consider those audits reported on the report due 15 October and early in May to consider those audits listed on the report due 15 April. The Board may meet at other times, as necessary.

(iv) Hear the contracting officer’s presentation of efforts to resolve and dispose of the audit recommendations.

(v) Assist the contracting officer in developing a plan of action for timely resolution and disposition of the audit recommendations.

(vi) Provide the contracting officer with necessary guidance and assistance to resolve and dispose of the audit recommendations. This shall include reordering priorities, assigning additional or alternate resources or committing the personal attention of the HCA or the PARC to the effort.

(b) If the PARC determines that it is not practical to have the contracting officer attend the Board meeting because of distance or other reasons, video teleconferencing may be used.

(c) Upon completion of its review, but not later than 30 November and 31 May, the Overage Audit Review Board shall submit to the addressee in 5101.290(b)(5), under a summary cover letter from the PARC, a detailed plan of action for the resolution and disposition of each audit report in the three major categories listed in (1).

(1) The Board shall separate the audits into the following three major categories for reporting:

(i) 6-12 months old, unresolved.
(ii) Overage (over 12 months old), unresolved.
(iii) Overage (over 12 months old), resolved.

(iv) Resolution date slip from previous report.

(2) Each plan of action shall contain the following information:

(i) Audit report number.
(ii) Report date.
(iii) Contractor name.
(iv) Type of audit.
(v) Cost questioned or cost avoidance.
(vi) A narrative plan of action for resolution and disposition of the audit findings.
(vii) Target resolution date.
(viii) Target disposition date.
(ix) Contracting officer’s name.
(x) Contracting officer’s phone number.

(3) The Board’s report shall describe the action taken under (a)(6) and (7) and identify attendees and their role in the process, such as the contracting officer.

[AFARS Revision #22, dated September 12, 2007]

Subpart 5142.15 -- Contractor Performance Information

5142.1502-90 Policy.

(a) A Performance Assessment Report (PAR) (also knows as a Contractor Performance Assessment Report (CPAR))shall be prepared for those contracts, as well as Level 1 and 2 subcontracts where performance can be clearly measured, and is expected to exceed the following thresholds:

Business Sector | Threshold | Assessing Official |
Systems | $ 5,000,000. | PM |
Operations Support | $ 5,000,000. | Contracting Officer |
Services | $ 1,000,000 | Contracting Officer or PM* |
Information Technology | $ 1,000,000. | Contracting Officer |
Construction | $ 550,000 | IAW FAR/DFARS/AFARS Parts 36/236/5136 |
Architect-Engineering | $ 30,000 | IAW FAR/DFARS/AFARS Parts 36/236/5136

* The PM (Program/Project/Product Manager) is the assessing official for those service contracts providing technical or management support to the program office. [AFARS Revision #21, dated May 22, 2007]

(b) Except as provided in 5142.1502-90(i) below, performance reports may be prepared in, and shall be entered in the Contractor Performance Assessment Reporting System (CPARS) . (See 5142.1503-90). [AFARS Revision #21, dated May 22, 2007]

(c) A PAR/CPAR shall be prepared upon physical completion of the contract. When the contract period of performance will not exceed 18 months, prepare a single "final" assessment report. If the period of performance will exceed 18 months, prepare an "interim" assessment report at the completion of 12 months performance and annually thereafter until the contract is physically complete. For contracts awarded prior to the effective date of this policy, annual reports shall be prepared twelve (12) months from February 1, 1998, or such earlier date as deemed appropriate by the assessing official.

(d) An out-of-cycle or "addendum" report may be prepared if there is a need to record an extraordinary event prior to the next regularly scheduled evaluation or if it is necessary to report a meaningful occurrence during the period between physical completion of the contract and contract closeout. Additionally, addendum reports may be prepared to record contractor’s performance relative to contract close-out and other administrative requirements (e.g. final indirect cost proposals, technical data, etc.)

(e) For indefinite delivery type contracts (except Job Order Contracts (JOC), see 5117.9005(d) and (i)(2) below)), PARs/CPARs are required when the total estimated contract value exceeds the thresholds for the appropriate business sector and in accordance with the following:

(1) Where the scope of the contract is narrow or orders will be essentially similar, the contracting officer shall prepare reports in accordance with 5142.1502-90(b). If the contracting officer requires assessment input from external ordering offices, such requirement shall be clearly stated in the ordering information/procedures for the basic contract.

(2) Where the scope of the contract is broad or the nature of individual orders could be significantly different, the contracting officer may require the ordering officer to prepare a PAR/CPAR for each order exceeding $100,000 in accordance with 5142.1502-90(b). If so, the contracting officer shall clearly state this requirement in the ordering information/procedures for the basic contract.

(3) Any activity issuing an order against another activity’s contract shall either prepare the PAR/CPAR, or provide input to the PAR/CPAR, as specified in the basic contract. [AFARS Revision #21, dated May 22, 2007]

(f) PARs/CPARs are required for "joint venture" contracts. The report shall be prepared for the joint venture, not for each participating contractor. However, each contractor will be specifically identified in the performance report. Where specific responsibilities of each contractor is known (e.g., systems integration, software development, propulsion systems, etc.), also include this information.

(g) Rating System: Use the following rating system to assess contractor performance for all Past Performance Information (PPI) elements:

(1) Exceptional (Dark Blue) - Performance meets contractual requirements and exceeds many to the Government’s benefit. The contractual performance of the element or sub-element being assessed was accomplished with few minor problems for which corrective actions taken by the contractor were highly effective.

(2) Very Good (Purple) - Performance meets contractual requirements and exceeds some to the Government’s benefit. The contractual performance of the element or sub-element being assessed was accomplished with some minor problems for which corrective actions taken by the contractor were effective.

(3) Satisfactory (Green) - Performance meets contractual requirements. The contractual performance of the element or sub-element contains some minor problems for which corrective actions taken by the contractor appear or were satisfactory.

(4) Marginal (Yellow) - Performance does not meet some contractual requirements. The contractual performance of the element or sub-element being assessed reflects a serious problem for which the contractor has not yet identified corrective actions. The contractor’s proposed actions appear only marginally effective or were not fully implemented.

(5) Unsatisfactory (Red) - Performance does not meet most contractual requirements and recovery is not likely in a timely manner. The contractual performance of the element or sub-element contains serious problem(s) for which the contractor’s corrective actions appear or were ineffective.

(h) The rating assigned to an element/sub-element must be supported by narrative rationale. Narratives are required for all ratings, and must clearly convey to the contractor, as well as to a Government source selection official who is not familiar with the instant contract, why the rating was assigned. This is especially important for any rating above or below "satisfactory." Narratives should be supported by quantifiable or verifiable documentation. While larger or more complex efforts warrant greater detail, the guideline for any narrative is "clear and concise."

(i) Exceptions:

(1) A PAR/CPAR need not be prepared for: Science & Technology contracts (budget elements 6.1, 6.2 and 6.3) or Facilities/Property Management contracts (FAR 45.302-2). However, the Head of the Contracting Activity (HCA) may require that PARs/CPARs be prepared for Science & Technology contracts, where such is determined to facilitate efficient and effective acquisition. In such cases, the procedures stated herein shall apply. Additionally, the assessing official may choose the most appropriate format to record the contractors past performance information, i.e. "systems" or "non-systems."

(2) PARs for construction and architect-engineering (A-E) services shall be prepared and distributed in accordance with FAR/DFARS/AFARS Parts 36, 236, and 5136, respectively. Notwithstanding 5142.1501-90(b)(3)(iii) and (b)(5), PARs for Job Order Contracts (JOC) shall be prepared and distributed in accordance with AFARS 5117.9005(d).

(3) PARs/CPARS prepared for Special Access Required Programs shall not be input in CPARS. If the information required for input into CPARS is classified, it shall not be reported. See Army Regulation (AR) 715-30 as revised, for maintenance of past performance information that cannot be maintained in an unclassified database.

[AFARS Revision #21, dated May 22, 2007]

5142.1503-90 Procedures.

(The Contractor Performance Assessment Reporting System (CPARS) shall be used when preparing performance evaluations. The CPARS is accessed via the internet at http://www.cpars.navy.mil. [AFARS Revision #21, dated May 22, 2007]