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SAOC Training - July 2015

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SAO CENTRAL TRAINING MONITORING CONTRACTOR PERFORMANCE,

INVOICING & PAYMENTS (THE IMPORTANCE OF CONTRACT SURVEILLANCE)

SAOC Training – July 2015

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SAOC QA & Training Presenters

This will be a joint training presentation by the SAO Central Training Officer and the SAO Central Quality Assurance Staff.

Annette Gaessler, SAOC VABIT Program Manager & Training Officer

Robert “Jake” Jacobson, SAOC Procurement Analyst & QA Officer

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Monitoring Contractor Performance, Invoicing & Payments

Agenda

Objectives of this training module Provide “Big Picture” of the contractor performance monitoring process Role of the CO and COR(s) and Contractor Required Contract Documents & Usage Surveillance Tools, i.e. Contract, QASP, etc. OIG/QA Findings & Negative trends What QA/Compliance is looking for Best Practices/Recommendations Summary/QA

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Monitoring Contractor Performance, Invoicing & Payments

Objectives

Obtain a better appreciation of the vital importance of contract surveillance and administration

Review roles and responsibilities of CO, COR and the Contractor Have a better appreciation and understanding of the vital role the COR

has in performing their duties/tasks to effectively monitor contractor’s performance of the contract

Share negative trends and findings from desk top monthly surveillance QA reviews and other audits.

Have a better insight of what documentation QA is looking for to ensure proper contract administration is being performed

Share Best Practices of effective contract administration

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Monitoring Contractor Performance, Invoicing & Payments

“Big Picture” of the overall contract monitoring process (ID key roles and responsibilities of CO, COR and Contractor)

Contract administration is the process of ensuring that each party’s performance meets all contractual requirements.

Ensuring any changes to the existing contract are being properly

executed and authorized by the CO

Monitoring contractor’s performance until successful completion of contract

Ensure proper review and timely payment of invoices

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Monitoring Contractor Performance

Role of the Contracting Officer (CO)

The Contracting Officer (CO) is responsible for contract administration. Contract administration begins after the contract has been awarded, ends when the goods or services have been accepted, the contractor has received final payment, and the contract has been formally closed out.

The contractor's progress must be closely monitored to identify potential problems that threaten performance.

The CO is to designate, in writing, a Contracting Officer Representative (COR) on contracts as required by the FAR 1.604 and the VHA Procurement Manual, Volume 6, Chapter 19.

Contract administration includes oversight management and includes several key players.

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Monitoring Contractor Performance

Role of the Contracting Officer (CO) continued

Part of oversight management include the awareness of all security or Patient Privacy issues that may be impacted by contractor personnel performance of the contract.

If contractor personnel will be required to complete security or privacy training, the CO must obtain confirmation from the COR that the requirement has been met.

The CO is to ensure the specific VA Medical Center’s policies regarding security requirements, work scheduling, and site access are followed.

The CO is to conduct regular review of the COR contract file to ensure contractor performance and compliance is being properly monitored by the COR.

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Monitoring Contractor Performance

Role of the Contracting Officer (CO) continued

Only the CO may enter into a contract, a contract modification, or change a contractual commitment. The CO is responsible for ensuring compliance with the contract. The CO will promptly issue decisions on contractual problems and questions, and consult with Office of General Counsel when necessary.

The CO is to conduct, at a minimum, a CO-COR quarterly meeting. Meetings are to be documented in the eCMS file.

Contract Files: The CO will be responsible for the (ECMS) contract file, including the retention of contract documents and completion of the appropriate Contracting File Checklist.

See additional guidance in (FAR 2.101, & 42.302, 46.103) Contracting Officer Responsibilities

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Monitoring Contractor Performance

Role of the Contracting Officer’s Representative (COR)

Oversight Management: Oversight management is overseeing the technical performance requirements of the contract and is primarily the responsibility of the COR. It ensures that the contractor delivers the required goods or performs the work according to the delivery schedule in the contract. It also includes monitoring the expenditure of funds in relation to the contract ceiling.

Note: The Program Office is responsible for ensuring that adequate resources are available for monitoring contractor performance. Ref: VHA PM, COR SOP, Chapter XIX, Para 3.5.2

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Monitoring Contractor Performance

Role of the COR Continued:

COR Files: Throughout the contract, the COR must maintain a complete record of the status and results of the oversight of the contract and retain all pertinent and original documents. i.e. Miscellaneous correspondence with contractor; notifications to the contracting officer.

The CORs function is the eyes and ears of the CO and serves as the liaison between the government and contractor when executing surveillance responsibilities.

See additional guidance in FAR 2.101, FAR 46.104 and VHA PM, Vol Six, Chapter XIX, COR Responsibilities

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Monitoring Contractor Invoicing & Payments

COR Responsibilities Invoice Payments Record Keeping CORs are required to maintain contract administration files and must follow invoice

validation processes before certifying each invoice if the COR is the certifying official. VHA PM COR SOP Invoice Validation

COR will validate invoice within five (5) days of receipt IAW all terms and conditions of contract and performance monitors.

COR will notify the CO if the invoice is not valid within three (3) business days and take appropriate action as directed by the CO, i.e. reducing payment amount of invoice or rejecting it altogether.

COR will update the COR invoice tracking report as invoices are finally validated. COR will Certify invoice for payment only after validating that it matches the contract

terms.

Note: Invoices are now certified in the VA Financial Services Center (VAFSC) Invoice Payment Processing System (IPPS) which replaced (OLCS)

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Monitoring Contractor Invoicing & Payments

COR Responsibilities & Invoice Validation Continued: If the COR is NOT the certifying official, the COR must:

Respond to the certifying official when notified that an invoice has been received. Validate the invoice within five (5) days of receipt against the terms of the contract

and performance monitors. If the invoice is accurate, notify the Certifying Official that the invoice is proper and

may be certified without change. If the invoice is not accurate or complete, notify the CO and the Certifying Official

of the problem. Notify the Certifying Official of the COs decision and direction.

Ref: VHA PM, Volume Six – Procurement Process, Chapter XIX: COR, Para 6.2 Invoice Validation VHA PM COR SOP

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Monitoring Contractor Performance, Invoicing & Payments

Role of the Contractor

The Contractor is responsible for carrying out ALL requirements under the contract by controlling the quality of supplies or services rendered to the Government.

The Contractor may be required to provide and maintain an inspection system or program, i.e. (QCP) that is acceptable to the Government.

The contractor is responsible for performing all inspections and tests required by the contract except those specifically identified & reserved for performance by the Government.

See additional guidance in (FAR 46.105) Contractor Responsibilities

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Documentation Requirements

Key Contract Administrative Documents – (Including but not limited to depending on type of procurement)

C03 Starts with the signed and executed contract by both authorized parties to include all modifications w/key documents: i.e. Security Requirements, SOW, or PWS, QASP Properly Distributed, (FAR 4.803)

C05 Post award/Pre-performance conference minutes (FAR 42.503)

C08 Award Letter/Notice to Proceed (FAR Clause 52.212-2)

C10 Security/Background Check Documentation (VA Handbook 6500 & FAR 4.803)

C11 COR LOD/Certification Training (VAAR 801.603)

C12 Miscellaneous COR QA Records (as applicable)

C14 Contract Performance progress report/meetings (Mandatory Quarterly Meeting between CO/COR is required) See VHA PM, SOP COR, Section – 6.1.2

Ref: See Current Contract Action ECMS Briefcase dated 3-20-2014

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Documentation Requirements

Key Contract Administrative Documents Continued

C15 Delinquency Notices, I.e. Cure Notice, Show Cause, etc. (As applicable, FAR Part 49 – 49.607 and FAR Part 12.403)

C16 Stop Work Order; Suspension of Work (As applicable)

C17 Site Visit Documentation (FAR Part 42.5 & 42.503-3)

C20 Progress Schedule/Progress Reports (FAR Part 32.5 & 32.102)

C21 – C28 Other Miscellaneous Construction Documents (As applicable)

Ref: VHA PM, COR SOP Attachment A: COR File Review Checklist, Rev: 10/20/2014

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Documentation Requirements

Key Contract Administrative Documents Continued

C29 Invoices/Payment Vouchers (FAR 32.9)

C32 Final Acceptance/Completion/Beneficial Occupancy (As Applicable FAR 46.407)

C33 Contract Completion Certificate (FAR 4.804)

C34 Release of Claims/Custody Receipt (As applicable)

C35 Performance Evaluations (CPARS) FAR 42.1502

MP01 Request for Modification to Contract (As applicable FAR 4.803)

Note: There may be other and/or additional contract administrative documents depending on scope and nature of the acquisition the CO/COR and Contractor is executing. See proper FAR/VAAR Part as well as the ECMS Action Briefcase for additional guidance dated 3-20-14

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VHA Audit Office Performs their Annual Audits SAO/NCOs

What VHA Compliance Audit Office is looking for:

Letter of Delegation/Training Certificate in ECMS C11 Documentation of Quarterly Meetings between CO and COR

in ECMS C14 Reference: Summary Annual Audit Report for all VHA SAOs FY15

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What SAOC QA Looks For

What SAOC QA is looking for: Letter of Delegation/Training Certificate in ECMS C11 folder ECMS Data Values is consistent with documents uploaded. Record of Post Award Briefing/Conferences (If applicable)

Documentation of Quarterly Meetings with COR (As Requested)

QASP (As Applicable)

COR documents are reviewed/signed (Monthly Surveillance Audits)

Invoices are being reviewed and promptly paid (As requested)

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Negative Trends

Negative Trends Found (A-123 Report)A-123 Acquisition Assessment Final Report, November 2013 – Findings of 31 “High Risk” contract files reviewed, generally contain:

ZERO documentation related to performance, inspection, accepting invoice or payments, Ref: p. 76 of 84

74% of files did NOT show evidence of performance 85% of modifications were not properly executed 55% of SAOC contracts missing contract admin documents 62% of files missing LOD 76% of files missing COR training certifications

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Negative Trends

Negative Trends Found OIG ReportOIG Report VHA Support Service Contracts dated 11-19-2014

Generally COs did not ensure paid invoice amounts were correct and funds were properly de-obligated following contract completion. – Monitoring contract performance needs improvement, COs must ensure all invoices are validated against terms and conditions of the contract. Ref: p. 2 of 28 in report.

COs did not delegate CORs 71% of contracts reviewed and only 30% for sole source contracts. Ref: p. 14 of 28 in report

85% of contracts reviewed missing quarterly meetings between COs and CORs. Ref: P. 15 of 28 in report

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Negative Trends

Negative Trends Found VHA QA/Compliance Audit Summary Report FY14, Dated 01-08-2014

Top Areas of Non-compliance for of all (3) Regions

91% Non-compliant COR Quarterly Meeting Documentation (Q11) Audit

55% and 36% Non-Compliant – COR Appointments and Delegations (Q9/10)

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Negative Trends

Negative Trends found by SAOC QA

Based on the SAOC QA Monthly Surveillance Report, the overall success rate of documentation showing Letters of Designation assigned to CORs and Training Certificates

uploaded in ECMS Folder C11/C12 respectively is at 52% success rate.

Note: This statistic is cumulative based on monthly surveillance report results over a (3) year period from May FY13, FY14, and FY15 Present

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Best Practices

Best Practices & Recommendations – Monitoring Contract Performance Provide complete contract to all parties who will be involved with

implementation and execution of contract All must read and familiarize themselves with contract and its requirements Have a fully trained and dedicated COR(s) to readily assist the CO and

acquisition team in providing excellent surveillance of contract(s) Review lessons learned from similar previous contracts what worked, and

what did not work so well. -- Being a failure is only a failure if you fail to learn from it. Develop a contract administration plan Establish a workable and effective QASP

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Best Practices

Best Practices Continued – Monitoring Contract Performance

Have more Post Award briefings with all pertinent parties and cover contract requirements, milestones, customer expectations, QCP/QASP. --Obtain meeting of the minds between contractor and government.

Provide recognition and/or establish work incentives for both COs and COR(s) who are performing outstanding work in the field.

If at all possible establish a formal COR program to meet all VHA mission acquisition requirements with FOCUS on getting the right individual with skill-set and experience appointed as the COR who will be dedicated to providing FT support of contract until close-out.

Holding the CO, COR and Contractor accountable for results will go a long ways to ensuring these contracts are executed successfully.

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Best Practices

Final Best Practices Recommendation What Gets Measured Gets Done

Our VHA Compliance Audit Office along with SAOC QA need to do a better job to incorporate key areas in our monthly surveillance to better monitor and track contractor performance documentation for continuous improvement!

If we are not tracking these areas already identified as deficient each month/quarter for improvement, how do we know if we are getting better as an agency?

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Monitoring Contractor PerformanceSummary

Our Agency relies heavily on the private sector to support our mission in serving our VETS. Because of the critical reliance on contract support and large expenditures involved in numerous areas of procurement, our contract surveillance takes on an even more vital role to ensure our contracts in place are receiving quality healthcare services and supplies in a timely manner in mitigating performance problems. It’s our mission to ensure our VETS receive the best of care!

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REGULATIONS AND POLICY REFERENCES

FAR Parts 4, 42, 32, 45, and 46 (Surveillance Responsibilities) VAAR 801.603-70 COR Delegation VAAR 842 Contract Administration & Audit Services VHA Procurement Manual, Procurement Process, Volume Six, Chapter

Twenty, Contract Administration VHA Procurement Manual, Volume Six, Chapter 19,

Standard Operating Procedure (SOP) COR VA Handbook 6500.6, Contract Security VA Handbook 0710, Personnel Security and Suitability Program VHA Directive 0710, Personnel Security and Suitability Program VHA PM Volume Six Chapter VII: Contract Requirements for Security IL 049-08-02 (As Amended) Department of VA, OA&L ECMS Action Briefcase Indexes updated 3-20-2014

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RESOURCES

VHA CO/COR Supplemental Training Guide COR File Review Checklist COR Responsibility Matrix Sample COR Nomination Memorandum Sample COR Delegation Memorandum Sample COR Quarterly Contractor Performance Report Sample COR Quarterly Invoice Report Summary Sample COR Training Report Sample CPARS Evaluation Report Sample COR File Index Sample COR Relevant POC’s and Duties Resource: VHA COR Community

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ADDITIONAL RESOURCES

VHA OIG Report: Audit of Support Service Contracts, November 19, 2014

Contract Administration – Tools, Techniques, and Best Practices, By Gregory A. Garrett, Wolters Kluwer, Law & Business

DoD COR Handbook, March 22, 2012, Director, Defense Procurement & Acquisition Policy

Managing Federal Government Contracts – “The Answer Book” By Charles D. Solloway, Jr. CPCM, Management Concepts Press

Applied Learning On-line ASI Government Course “Role of the Contracting Officer Representative”

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Monitoring Contract Performance & the The Importance of Contract Surveillance

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QUESTIONS

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