The review that helps DoD create better contract management documentation

With a record-breaking new defense budget, Defense Contracting Management Agency wants to make sure individual agencies have the skills necessary to fulfill contracting obligations and follow all the rules. While many bigger agencies have internal review programs, smaller agencies rely on a procurement management review (PMR) to find errors in their contracting programs and identify best practices.

Army Col. Joseph Davis of DCMA is the program manager for the PMR. DCMA, in concert with Defense Pricing and Contracting and a group of volunteers from various agencies, performs reviews every three years for Defense Department agencies that don’t have internal review programs.

“These agencies, unlike military departments, are typically not large enough to have a separate staff devoted to the review function. Reviews give the director an objective appraisal of the contracting operations of these agencies, the problems they’re facing and successes they have achieved,” Davis said.

Before Davis’ team conducts a review, the agency gets a notification letter. It offers a list of the requirements for the review and gives the agency a chance to get their paperwork in order, put it all in one place, and make sure people are available to talk to the reviewers.

“We select a random sample of people within the contracting group to conduct interviews about the health and the overall feeling in the agency, what the atmosphere is, and how people feel about the agency and that kind of gives us a sounding board,” Davis said.

At each agency, PMR’s team picks about 100 contracts and goes through them to make sure the agency followed protocols. At the end of the process, the team gives the agency a report with recommendations for changes. The agency can then add comments if anything from the report needs to be clarified. If possible, the agencies will have one of their own employees volunteer to be on a review team before their own review in order to learn about the process.

Davis said the biggest problems his team sees have to do with documentation. A contract might have missing paperwork, or reports have not been filled out correctly. The documentation should tell the story of the contract, but in some cases parts are missing. An agency might not have documented its completed market research, or it failed to keep a record after an extension was granted.

“When we make recommendations, it’s something that we’ve seen across multiple contracts that we reviewed, and it’s probably something that’s in direct conflict with the Federal Acquisition Regulation, the Defense Federal Acquisition Regulation, local policy, and could put the agency at risk. We’re trying to help the agency get better and protect DoD,” Davis said.

While the management teams find plenty of problems that can be easily corrected, some longer term issues require a change of policy. Davis said agencies need to get better at making sure all the contract actions are properly filed with the Federal Procurement Data System, and include all the clauses and solicitations tailored to the specific requirements of a given contract.

Another error the team frequently finds is an incomplete small business coordination record. Form DD 2579 needs to be completed and signed by small business specialists and retained in the contract file.

“That’s one of the top findings we have seen over and over the course of the year, Davis said.

Overall, good record keeping means the devil is in the details. A government estimate needs to be just that, and not a contractor’s estimate on the contractor’s letterhead.

“You just have to go through your documentation and not just check boxes but actually look at it and review it,” said Davis.

In looking at the difference between bigger agencies and smaller agencies, Davis said the smaller ones tend to have more complete and conforming contract packages. He thinks the smaller groups are able to spend more time on the details. The PMR newsletter recognizes Department of Defense Education Activity and Defense Information Systems Agency as agencies that stand out with good contract management.

“Smaller agencies may not have as big a workload, may not have as many contracts. So they might have a little bit more time to really look at their contracts and make sure they’re complete,” Davis said.

While the PMR may find mistakes and a need for corrective action, Davis emphasized that the goal is to help the agency and not just call it out for errors. He said agencies that are reviewed generally look much better at follow up reviews.

“It sounds cliché: we’re from the government, we’re here to help. But we really are coming in to help them be better. So don’t take our suggestions and recommendations as a hit on you. It’s not a hit on you. It’s a ‘hey, this is how you can get better,’” Davis said.

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