Redstone Government Consulting Blog | DFARS Business Systems (9)

Section 880 of the National Defense Authorization Act (NDAA) included provisions restricting the use of the Lowest Price Technically Acceptable (LPTA) source selection criteria to only procurements where:

Per DFARS 252.204-7012, Contractors were to implement NIST SP 800-171 by 12/31/2017 “Safeguarding Cover Defense Information and Incident Reporting”. However, Contractors self-certification has not gone as well as the Department of Defense (DoD) had hoped.  They have even included it as part of 2019 Contractor Purchasing System Reviews (CPSR) for the Defense Contract Management Agency (DCMA) to evaluate Contractors monitoring of subcontractor’s self-certification.  In the meantime, DoD has shifted gears and is developing the Cybersecurity Maturity Model Certification (CMMC) to help strengthen the DoD supply chain's cybersecurity at all levels of the supply chain, from the prime Contractor on down to the lowest subcontractor. 

Future Supply-Chain Rules to Be Implemented Under Executive Order 13873, and Under Sections 889(a)(1)(B) and 889(b) of the 2019 NDAA

There have been several recent developments in U.S. law, relating to non-tariff restrictions on foreign-origin information technology and telecommunications equipment, with a focus on Chinese-origin products. This is the third installment of a three-part series on this topic.

Supply-Chain Rules from Section 889(a)(1)(A) of the NDAA for 2019 (Implemented by FAR Subpart 4.21)

There have been several recent developments in U.S. law, relating to non-tariff restrictions on foreign-origin information technology and telecommunications equipment, with a focus on Chinese-origin products. This is the second installment of a three-part series on this topic.

Supply-Chain Rules Under DFARS Subpart 239.73

In the ongoing trade war between the U.S. and China, the U.S. Government’s Section 301 tariffs on Chinese-origin goods has received most of the attention, and rightfully so. Effective September 1, 2019, these tariffs generally impact all Chinese-origin goods imported into the United States, including all information technology and telecommunications equipment (“Equipment”). However, there have also been several recent developments in U.S. law, relating to non-tariff restrictions on foreign-origin Equipment, with specific focus on Chinese-origin products.

The Federal Acquisition Regulation (FAR) implemented Section 822 of the Fiscal Year 2017 National Defense Authorization Act (NDAA) which requires contactors to submit additional certified cost or pricing data when only one offer is received in response to a competitive solicitation.  Certified cost and pricing data is required when the following three criteria are met:

We get lots of questions about Government property and how it should be handled with subcontractors. Remember, and it has been said over and over, the prime contractor is responsible for just about anything subcontractors do in support of a contract. And yes, that includes Government property requirements.

As a follow-up to our recent blog post, My CPA Audited My Financial Statements. Does That Mean My Accounting System is Adequate?  where we covered some differences between a financial statement audit and an adequate accounting system, we received several great questions from our readers.  We thought it might be beneficial to address them via a new blog post for the benefit of all our readers.  We welcome discussion on our blogs, though we do so in private via email.  In this case, though, these questions are ones we see frequently and impact all companies doing business with the U.S. Government.

Recently, there has been much discussion around comments made by Katie Arrington, the special assistant to the Assistant Secretary of Defense for Acquisition for Cyber in the Office of the Under Secretary of Acquisition and Sustainment in DoD.  She made the following statement before a roomful of vendors at the PSC meeting in Arlington, VA.

We have recently had to deal with issues related to DCAA applying DFARS business system rules in DFARS 252.242-7006 Accounting System Administration in its evaluation of small business client accounting systems. The DFARS business system rules were never intended to be applied to small businesses. Further, the limited resources of a small business make it very difficult for a small business to fully comply with all 18 of the specific criteria contained in the business system rules. DFARS 252.242-7005 regarding the applicability of the business system rules states: