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   <concept id="DFARS_PGI_242.7000"
            outputclass="3"
            ditaarch:DITAArchVersion="1.2"
            class="- topic/topic concept/concept ">
      <title class="- topic/title ">
         <ph props="autonumber" class="- topic/ph ">PGI 242.7000</ph> Contractor business system deficiencies.</title>
      <conbody class="- topic/body  concept/conbody ">
         <p outputclass="List1" class="- topic/p ">(b) <i class="+ topic/ph hi-d/i ">Determination to withhold
payments.</i> The following are sample formats for written notifications
of contracting officer determinations to initiate payment withholding,
reduce payment withholding, and discontinue payment withholding
in accordance with the clause at DFARS <xref href="252.242-7005.dita#DFARS_252.242-7005"
                  base="DFARS-252.242-7005"
                  outputclass="fm:ParaNumOnly"
                  class="- topic/xref ">252.242-7005</xref>,
Contractor Business Systems:</p>
         <p outputclass="List2" class="- topic/p ">(1) Use this sample format for written
final determinations to implement payment withholding:</p>
         <p class="- topic/p ">Payment Withholding</p>
         <p outputclass="List3" class="- topic/p ">(i) The purpose of this final determination
is to disapprove your <i class="+ topic/ph hi-d/i ">[identify the contractor business system(s)]</i> and
implement payment withholding per the terms of the DFARS clause
at <xref href="252.242-7005.dita#DFARS_252.242-7005"
                  base="DFARS-252.242-7005"
                  outputclass="fm:ParaNumOnly"
                  class="- topic/xref ">252.242-7005</xref>,
Contractor Business Systems.</p>
         <p outputclass="List3" class="- topic/p ">(ii) It is my final determination that
XXX System(s) contains the following significant deficiencies:</p>
         <p class="- topic/p ">—<i class="+ topic/ph hi-d/i ">[list all significant deficiencies]</i>
         </p>
         <p outputclass="List3" class="- topic/p ">(iii) Effective immediately, five percent
(or a lesser percentage if five percent will exceed the withhold
limitations in the DFARS clause at <xref href="252.242-7005.dita#DFARS_252.242-7005"
                  base="DFARS-252.242-7005"
                  outputclass="fm:ParaNumOnly"
                  class="- topic/xref ">252.242-7005</xref>)
of each request for payment under the contracts in Attachment A
will be withheld as described below for significant deficiencies
in XXX system. Upon receipt of an acceptable corrective action plan
and my determination that this corrective action plan is being effectively
implemented, I will issue a notification with respect to reducing
the percentage being withheld to two percent until I determine that
all significant deficiencies, as identified in this final determination,
have been corrected. Failure to follow the accepted corrective action plan
will result in an increase in the percentage withheld against each
payment under this contract to five percent (or a lesser percentage
if five percent will exceed the withhold limitations in DFARS <xref href="252.242-7005.dita#DFARS_252.242-7005"
                  base="DFARS-252.242-7005"
                  outputclass="fm:ParaNumOnly"
                  class="- topic/xref ">252.242-7005</xref>).<i class="+ topic/ph hi-d/i ">[Repeat
this paragraph, as necessary, if multiple withholds are being applied
to multiple systems in accordance with <xref href="252.242-7005.dita#DFARS_252.242-7005"
                     base="DFARS-252.242-7005"
                     outputclass="fm:ParaNumOnly"
                     class="- topic/xref ">252.242-7005</xref>(</i>
            <i class="+ topic/ph hi-d/i ">d)]</i>
         </p>
         <p outputclass="List3" class="- topic/p ">(iv) For payments under cost, labor-hour,
or time-and-material contracts: The Contractor shall apply a five
percent (or a lesser percentage if five percent will exceed the
withhold limitations in DFARS <xref href="252.242-7005.dita#DFARS_252.242-7005"
                  base="DFARS-252.242-7005"
                  outputclass="fm:ParaNumOnly"
                  class="- topic/xref ">252.242-7005</xref>)
withhold to the amount being billed and prepare a cost voucher in
Wide Area WorkFlow (WAWF) for the net amount due. The Contractor
shall show the amount withheld on the current billing, as well as
the cumulative amount withheld to date on this contract in accordance
with DFARS clause <xref href="252.242-7005.dita#DFARS_252.242-7005"
                  base="DFARS-252.242-7005"
                  outputclass="fm:ParaNumOnly"
                  class="- topic/xref ">252.242-7005</xref>,
in the Comments block of the Miscellaneous Info Tab in WAWF.</p>
         <p outputclass="List3" class="- topic/p ">(v) For progress payments: The Contractor
shall prepare the request in WAWF without applying any withhold
percentage. The Contracting Officer will reduce the approved amount
by five percent (or a lesser percentage if five percent will exceed
the withhold limitations in DFARS <xref href="252.242-7005.dita#DFARS_252.242-7005"
                  base="DFARS-252.242-7005"
                  outputclass="fm:ParaNumOnly"
                  class="- topic/xref ">252.242-7005</xref>)
and record the amount being withheld on the progress payment request,
as well the cumulative amount withheld on this contract in accordance
with DFARS clause <xref href="252.242-7005.dita#DFARS_252.242-7005"
                  base="DFARS-252.242-7005"
                  outputclass="fm:ParaNumOnly"
                  class="- topic/xref ">252.242-7005</xref>,
in the Comments block of the Miscellaneous Info Tab in WAWF.</p>
         <p outputclass="List3" class="- topic/p ">(vi) For performance-based payments: The
Contractor shall prepare the request in WAWF without applying any
withhold percentage to the performance based payment event schedule
amounts. The Contracting Officer will reduce the amount approved
by five percent (or a lesser percentage if five percent will exceed
the withhold limitations in DFARS <xref href="252.242-7005.dita#DFARS_252.242-7005"
                  base="DFARS-252.242-7005"
                  outputclass="fm:ParaNumOnly"
                  class="- topic/xref ">252.242-7005</xref>)
and record the amount being withheld on the performance based payment
as well as the cumulative amount withheld on this contract in accordance
with the DFARS clause <xref href="252.242-7005.dita#DFARS_252.242-7005"
                  base="DFARS-252.242-7005"
                  outputclass="fm:ParaNumOnly"
                  class="- topic/xref ">252.242-7005</xref> in
the Comments block of the of the Miscellaneous Info Tab in WAWF.</p>
         <p outputclass="List2" class="- topic/p ">(2) Use this sample format for determinations
to reduce payment withholding:</p>
         <p class="- topic/p ">Reduction of Temporary Payment Withholding</p>
         <p outputclass="List3" class="- topic/p ">(i) The purpose of this determination is
to reduce the payment withholding percentage per the terms of the
DFARS clause at <xref href="252.242-7005.dita#DFARS_252.242-7005"
                  base="DFARS-252.242-7005"
                  outputclass="fm:ParaNumOnly"
                  class="- topic/xref ">252.242-7005</xref>,
Contractor Business Systems, as a result of receiving an acceptable
corrective action plan from the contractor, dated YYYY/MM/DD, for
resolving deficiencies in its XXX system(s) as identified in the
Contracting Officer’s determination, dated YYYY/MM/DD. This reduction
is prospective and previous amounts withheld will not be reduced
or released at this time.</p>
         <p outputclass="List3" class="- topic/p ">(ii) Effective immediately, two percent
of each request for payment under this contract will be withheld
as described below. The two percent being withheld will remain in
effect until the Contracting Officer determines that the Contractor
has corrected all significant deficiencies as directed by the Contracting
Officer’s determination. Failure to follow the accepted corrective
action plan will result in an increase in the percentage withheld
against each payment under this contract to five percent (or a lesser
percentage if five percent will exceed the withhold limitations
in DFARS <xref href="252.242-7005.dita#DFARS_252.242-7005"
                  base="DFARS-252.242-7005"
                  outputclass="fm:ParaNumOnly"
                  class="- topic/xref ">252.242-7005</xref>).</p>
         <p outputclass="List3" class="- topic/p ">(iii) For payments under cost, labor-hour,
or time-and-material contracts: The Contractor shall apply a two
percent withhold to the amount being billed and prepare a cost voucher
in Wide Area WorkFlow (WAWF) for the net amount due. The Contractor
shall show the amount withheld on the current billing, as well as
the cumulative amount withheld to date on this contract in accordance
with DFARS clause <xref href="252.242-7005.dita#DFARS_252.242-7005"
                  base="DFARS-252.242-7005"
                  outputclass="fm:ParaNumOnly"
                  class="- topic/xref ">252.242-7005</xref>,
in the Comments block of the Miscellaneous Info Tab in WAWF.</p>
         <p outputclass="List3" class="- topic/p ">(iv) For progress payments: The Contractor
shall prepare the request in WAWF without applying any withhold
percentage. The Contracting Officer will reduce the approved amount
by two percent and record the amount being withheld on the progress
payment request, as well the cumulative amount withheld on this
contract in accordance with DFARS clause <xref href="252.242-7005.dita#DFARS_252.242-7005"
                  base="DFARS-252.242-7005"
                  outputclass="fm:ParaNumOnly"
                  class="- topic/xref ">252.242-7005</xref>,
in the Comments block of the Miscellaneous Info Tab in WAWF.</p>
         <p outputclass="List3" class="- topic/p ">(v) For performance-based payments: The
Contractor shall prepare the request in WAWF without applying any
withhold percentage to the performance-based payment event schedule
amounts. The Contracting Officer will reduce the amount approved
by two percent and record the amount being withheld on the performance-based
payment as well as the cumulative amount withheld on this contract
in accordance with the DFARS clause <xref href="252.242-7005.dita#DFARS_252.242-7005"
                  base="DFARS-252.242-7005"
                  outputclass="fm:ParaNumOnly"
                  class="- topic/xref ">252.242-7005</xref> in
the Comments block of the of the Miscellaneous Info Tab in WAWF.</p>
         <p outputclass="List2" class="- topic/p ">(3) Use the sample format below if payment
withholding is discontinued pending receipt of auditor or functional
specialist verification and based on evidence that the Contractor
has corrected all significant deficiencies, in accordance with DFARS
clause <xref href="252.242-7005.dita#DFARS_252.242-7005"
                  base="DFARS-252.242-7005"
                  outputclass="fm:ParaNumOnly"
                  class="- topic/xref ">252.242-7005</xref>,
Contractor Business Systems:</p>
         <p class="- topic/p ">Discontinuation of Payment Withholding Pending Verification</p>
         <p outputclass="List3" class="- topic/p ">(i) The purpose of this determination is
to approve your <i class="+ topic/ph hi-d/i ">[identify system(s)]</i> pending verification,
discontinue the payment withhold as identified in the Contracting
Officer’s determination dated YYYY/MM/DD, and release previous amounts
withheld on the contracts in Attachment A, in accordance with DFARS
clause <xref href="252.242-7005.dita#DFARS_252.242-7005"
                  base="DFARS-252.242-7005"
                  outputclass="fm:ParaNumOnly"
                  class="- topic/xref ">252.242-7005</xref>,
Contractor Business Systems.</p>
         <p outputclass="List3" class="- topic/p ">(ii) The discontinuation of the payment
withhold is made pending receipt of verification and based on my
review of the evidence submitted by the Contractor that all the
Contractor’s system(s) deficiencies identified in the Contracting Officer’s
determination dated YYYY/MM/DD have been corrected.</p>
         <p outputclass="List3" class="- topic/p ">(iii) The Contractor is authorized to submit
a bill in the amount of $XXXXXXXX. The billed amount should be submitted
on the same type of invoice as the withhold was originally taken,
as appropriate.</p>
         <p outputclass="List2" class="- topic/p ">(4) Use the sample format below if payment
withholding is discontinued after auditor or functional specialist
verification that the Contractor has corrected all significant deficiencies,
in accordance with DFARS clause <xref href="252.242-7005.dita#DFARS_252.242-7005"
                  base="DFARS-252.242-7005"
                  outputclass="fm:ParaNumOnly"
                  class="- topic/xref ">252.242-7005</xref>,
Contractor Business Systems:</p>
         <p outputclass="List3" class="- topic/p ">Discontinuation of Payment Withholding</p>
         <p outputclass="List3" class="- topic/p ">(i) The purpose of this determination is
to approve your <i class="+ topic/ph hi-d/i ">[identify system(s)]</i>, discontinue the payment
withhold as identified in the Contracting Officer’s determination
dated YYYY/MM/DD, and release previous amounts withheld on the contracts
in Attachment A, in accordance with DFARS clause <xref href="252.242-7005.dita#DFARS_252.242-7005"
                  base="DFARS-252.242-7005"
                  outputclass="fm:ParaNumOnly"
                  class="- topic/xref ">252.242-7005</xref>,
Contractor Business Systems.</p>
         <p outputclass="List3" class="- topic/p ">(ii) The discontinuation of the payment
withhold is made based on verification that all the Contractor’s
system(s) deficiencies identified in the Contracting Officer’s final
determination dated YYYY/MM/DD have been corrected.</p>
         <p outputclass="List3" class="- topic/p ">(iii) The Contractor is authorized to submit
a bill in the amount of $XXXXXXXX. The billed amount should be submitted
on the same type of invoice as the withhold was originally taken,
as appropriate.</p>
      </conbody>
   </concept>
</dita>
