Difference between revisions of "Proposal Audit Program"
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| + | If so, review the proposal package for adequacy based on the criteria established in the RFP. If the DFARS 252.215-7009 solicitation provision was included in the RFP, the company is required to provide the contracting officer with a completed DFARS Proposal Adequacy Checklist with its proposal submission. Review the checklist to assess and document conclusions about the proposal adequacy (CAM 9-103.1b). | ||
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Revision as of 13:39, 27 October 2015
Contents |
Proposal Audit Program
Adapted from DCAA’s Audit Program for Price Proposals [www.dcaa.mil]
Purpose
The purpose of this audit is to evaluate proposals for compliance with USG regulations (FAR Part 15 and 31, as well as applicable CAS provisions) and for commercial pricing actions which are not subject to USG requirements.
Areas of Risk
USG Compliance Risk
- • Commercial Pricing – FAR 12 Procurements
We price a proposal under FAR 12 asserting commerciality, but cannot demonstrate commerciality. The risk is the procurement may be deemed FAR 15 after pricing has occurred, but before contract award.
- • Cost and Pricing Data – FAR 15 Procurements
USG Compliance risks relate to the pricing of proposal whereas the proposal falls under cost and pricing data requirements. Risk for these types of proposals are:
- 1. Truth In Negotiations Act, (Defective Pricing)
- 2. False Claims Act
- 3. Cost Accounting Standards (CAS)
Risk in these procurements is that pricing is inaccurate, and we have overpriced the proposal, causing harm to the USG. In summary, pricing our products too high.
Commercial Pricing – Non-USG
The risk for commercial pricing is that we have not captured all costs, such as using USG rates to price Non-USG rates. USG rates exclude unallowable costs (per FAR 31) which are not applicable to commercial contracts. Another area is not applying Facilities Cost of Capital to commercial contracts as this is a USG concept, but one in which allows for a cost of money factor, which may not be included in commercial, non-USG pricing actions. The risk is pricing products too cheaply.
The purpose of this audit is to evaluate proposals for compliance with USG regulations (FAR Part 15 and 31, as well as applicable CAS provisions) and for commercial pricing actions which are not subject to USG requirements.
Planning/Desktop Audit Process
1.Determine the cost estimating risk of inaccurate, incomplete, or defective proposals on the USG. a.What type of procurement is this? Competitive, Sole Source b.What type of contract is this? Cost, Fixed Price c.Is this a TINA or CAS Covered Contract? d.Confirm that this proposal (to-be contract) would include the DFARS 252.215-7002 contract clause—See Appendix A. 2.Request the following items for preliminary desktop review: a.Evaluate the company’s Disclosure Statement (for full-CAS covered entities) items to become familiar with the disclosed accounting practices. b.Obtain and evaluate recent forward pricing rate agreements/recommendations or government audited rates. c.Obtain and review the most recent incurred cost submission, or year-end actual rates. d.Obtain the proposal log for the last 2 years, including history of proposals won. e.Request and review any written estimating and accounting system manuals/control documentation. f.Request and review the trial balance for prior 2 calendar years. g.Request and review all proposal deficiencies noted by DCAA, DCMA, or other auditing bodies. 3.Once the above documents are received and reviewed, select a proposal [/sample of proposals] to review against the audit steps on the following pages. a.Samples should be stratified in homogeneous procurement and contract types. 4.After sample selection, request additional supporting data. a.RFP for the proposal b.Proposal package, including all supporting data available c.Negotiation summary (if applicable) d.Contract award (if applicable) 5.Arrange a conference call to obtain an understanding of the BU’s proposal processes and its internal control structure. 6.Plan an onsite review to substantively test the audit steps on the following pages that cannot be performed remotely.
Procedures
The detailed audit steps are outlined on the pages to follow.
| # | Area | Audit Steps | Audit Activity/Notes |
|---|---|---|---|
| 1 | Preliminary Steps | Review the Request for Proposal (RFP):
a. Determine the company’s proposal responsiveness to the RFP (e.g. is the proposal for the supplies or services requested and does the company’s proposed quantity match the RFP requirements, etc.?) b. Identify the type of data required (i.e., certified cost or pricing data or data other than certified cost or pricing data). Determine whether the DFARS 252.215-7009(Proposal Adequacy Checklist – See Appendix 2) solicitation provision was included in the RFP to establish requirements for an adequate proposal. Section L of the RFP should provide instruction on how to submit proposals and information on a specific format to facilitate evaluation. FAR 15.403-5(b) provides that the contracting officer may require the proposal in the format of Table 15-2 of FAR 15.408, specify an alternative format, or permit submission in the company’s format. c. Identify and document any special requirements or provisions (i.e., limitations on pass-through charges, established rates, hours, time-phasing, material quantities, etc.). |
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| 2 | Preliminary Steps | Verify that the proposal was approved at an appropriate level of management.
If so, review the proposal package for adequacy based on the criteria established in the RFP. If the DFARS 252.215-7009 solicitation provision was included in the RFP, the company is required to provide the contracting officer with a completed DFARS Proposal Adequacy Checklist with its proposal submission. Review the checklist to assess and document conclusions about the proposal adequacy (CAM 9-103.1b). |
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Planning/ Desktop Audit Process
