Category:Business Systems

Background

Since the adoption of FAR 52.203-13, Contractor Code of Business Ethics and Conduct (effective December 24, 2007) there has been more attention to adequate contractor systems, since one of the criteria in the clause was to create and maintain an internal control system that will facilitate timely discovery and disclosure of improper conduct in connection with government contracts.

Fundamentals of All Business Systems

There are 5 fundamentals that apply to all business systems. They are:

1. Establish clear responsibilities,
2. Provide for internal controls and seperation of duties,
3. Maintain written policies and procedures,
4. Provide for employee training, and
5. Ensure appropriate management oversight.

Recent Developments with Business Systems

On February 24, 2012 the Final [DFAR] rule regarding contractor business systems was adopted into law (DFARS Case 2009-D038). See DFARS 252.242-7005 Contractor Business Systems

The Clause Covers 6 (Six) Contractor Business Systems

The 6 Business Systems are:

1. DFAR 252.242.7006 - Accounting System Administration
2. Earned Value Management (EVM) (252.234-7002)
3. Estimating System (DFAR 252.215-7002)
4. Purchasing System -DFAR 252.244-7001
5. Material Management & Accounting System (MMAS) (252.242-7004)
6. Property (252.245-7003)

For information on the history of the DFARs Business System Rule, see History of the DFARS Business System Rule