Need more points for OASIS unrestricted? Get your purchasing and estimating systems privately approved!
OASIS, a relatively new GSA-run government-wide acquisition vehicle for complex professional service requirements, will allow another large-scale on-ramp by the end of the year. GSA recently released some changes to its on-ramp RFP that relaxed the original RFP rules related to earning points for having approved purchasing and estimating systems. Per the revised Section L.5.5.1 of the RFP:
“Approved Purchasing System” means the Offeror’s systems for purchasing and subcontracting, including make-or-buy decisions, the selection of vendors, analysis of quoted prices, negotiation of prices with vendors, placing and administering of orders, and expediting delivery of materials has been audited and approved by the Defense Contract Management Agency (DCMA),Cognizant Federal Agency (CFA), or audited and found acceptable by a Qualified Private Auditor (QPA).
Similar language is found in revision Section L.5.5.4 for estimating systems.
The federal government’s recent increased movement towards accepting business system audits performed by independent public accountants is a welcome one. This enables government contracting firms of any size to get formal opinions on the status of their business systems without having to wait on DCAA, DCMA, or another agency audit. GSA clearly recognizes that there is a significant backlog at both agencies and that contractors do not have control over getting their names to the top of the next-to-audit list. Furthermore, GSA wants to empower these unintentionally “sidelined” companies by allowing them to procure their own business system audits and make them more competitive in this latest on-ramp iteration.
Let’s first explain how GSA defines a “Qualified Private Auditor.” GSA’s Civilian Contract Audit Services Ordering Guide states:
A qualified commercial auditor must be –
- GAGAS Compliant. The auditor performs audits in accordance with GAGAS of the Comptroller General of the United States.
- Peer Reviewed. The purpose of a peer review is to ensure a CPA firm does quality work in accordance with industry standards and regulation. The CPA firm must provide a copy of its most recently completed peer review report, as well as any internal documents issued to address corrective action for noted deficiencies.
Unsurprisingly, under this latest GSA on-ramp, they have requested that purchasing or estimating audit reports submitted also contain proof that the above qualifications were met and the audit was performed by a qualified private auditor. For instance, in CohnReznick’s contract audit reports provided to private company stakeholders, they explain that we have performed many GAGAS-compliant audits on behalf of four different civilian agencies for the past seven years. We also can provide a copy of our unqualified peer review report.
If your firm is contemplating submitting a proposal in this latest on-ramp and wants to earn more points for a compliant purchasing and/or estimating system, then you need to act sooner than later. For those who have received acceptances for either or both systems in the past, make sure these acceptances are current (three to five years is usually the standard).
In order to pursue current certification, first, government contractors must understand that audits of these systems are significant undertakings and generally cannot be done overnight. Second, to prove compliance, the contractor needs to have a history (DCMA likes using the term “artifacts” in its Contractor Purchasing System Reviews) of estimates and purchases performed under a system of DFARS-compliant processes.
In other words, simply rewriting policy and procedure manuals or buying a software package likely will not make your firm compliant. Firms need to enact compliant practices and be able to demonstrate compliance and the effectiveness of the internal controls surrounding these systems in accordance with the DFARS standards. Additionally, qualified, independent accounting firms will need at least 4-6 weeks to perform a purchasing or estimating system audit in compliance with GAGAS.
We recommend that firms take the following actions if they want to get these significant points:
1) Perform a high-level assessment of your purchasing and estimating systems against DFARS criteria (252.244-7001(c) for purchasing and 252.215-7002(d) for estimating).
2) Determine what corrective actions are necessary, if any, and how long it will take to implement them.
3) Ensure there will be sufficient documentation to audit (at least four to six artifacts that demonstrate compliant processes for both estimates and purchases) and that your firm obtains a final GAGAS audit report in time for your OASIS on-ramp proposal submission. Artifacts are examples of direct purchases under a federal government contract or estimates made on a federal government RFP based on compliant procedures.
4) By the time the firm has reached the documentation accumulation stage, it should have already selected an independent public accounting firm to perform the audit. This firm should have significant experience issuing GAGAS reports, particularly business system audits, to help guarantee report acceptance by GSA.
InsightHow Government Contractors Can Prepare for DCAA's New Focus on Business SystemsKristen SolesIn February 2019, the U.S. Government Accountability Office (GAO) released its report on monitoring and assessing Contractor Business Systems (CBS).
On-demandUpdates and Initiatives of the DCMA & DCAAKristen Soles and Christine WilliamsonJoin CohnReznick for a webinar discussing updates and initiatives of the Defense Contract Management Agency (DCMA) and Defense Contract Audit Agency (DCAA).
InsightSubcontract Audit Compliance: Is Your Company Prepared?Recently, the government has been making changes with how it assigns responsibility for audits of flexibly priced subcontracts, including cost type, time and material, and labor hour.
Insight2018 GAUGE Report: 2nd Annual Industry Roadmap of Benchmarks and Trends for Government ContractorsIn helping government contractors plan and strategize for the upcoming fiscal year, CohnReznick and Unanet have once again partnered to conduct a government contracting industry benchmarking survey.