Direct Billing Requirements by tgl10640

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									Direct Billing Requirements




             Kathy Sieber, CPA
                  Direct Billing
                   What is it?

   Allows the Auditor to authorize contractors to
    submit interim public vouchers directly to the
    Government. DFARS 242.803(b)(i)(C)
                 DCAA Policy

   Agency policy is to obtain the maximum
    contractor participation in the direct billing
    program.
   FAO’s should actively work with contractors
    to eliminate billing deficiencies and
    encourage participation.
                      Why?

   The direct billing program will reduce the
    administrative effort (both Government and
    contractor) related to interim public vouchers
    processing for contractors with adequate
    billing systems.
Criteria For Direct Billing Participation
           Major Contractors

   Billing system and related internal controls is
    considered adequate through DCAA audit
    (11010)
   Timely submission of Incurred Cost Proposal
    in accordance with FAR 52.216-7
   Submit final vouchers within 120 days after
    settlement of indirect rates in accordance
    with FAR 52.216-7(d)(5)
Criteria For Direct Billing Participation
        Non-Major Contractors

   Maintain an Accounting System acceptable for
    Government contract costing (i.e. Pre-Award Survey
    17740)
   Establish billing rates in accordance with FAR
    42.704.
   Maintain Cumulative Allowable Costs by contract.
   Adjust Billing Rates to reflect actual year-end
    allowable costs. FAR 42.704(c)
Criteria For Direct Billing Participation
        Non-Major Contractors

   Brief Contracts
   Submit Incurred Cost proposal in accordance
    with FAR 52.216-7
   Submit final vouchers within 120 days after
    settlement of indirect rates FAR 52.216-
    7(d)(5)
Determining Eligible Contractors


   A separate audit should not be generally
    initiated to determine eligibility.

   Information to make the decision should be
    readily available in perm files.
Notification Procedures

   When a FAO determines a contractor is
    eligible, then it will send a notification letter to
    the contractor requesting their participation in
    the program.

   Copies of the notification letter, along with
    the authorization will be sent to the cognizant
    ACO and appropriate Government Paying
    Office.
           Continued Participation

   Based on results of on-going surveillance of
    the contractor’s billing system.

    –   Majors: Cyclical ICAPS audits and Annual testing
        of Paid Vouchers

    –   Non-Majors: Annual Testing of Paid Vouchers
Rescinding Direct Billing Authority

   May Rescind Direct Billing if:
    –   Contractor fails to submit its incurred cost
        proposals.
    –   Audit report issued citing significant internal
        control weaknesses.
    –   A DCAA Form 1 was issued.
    –   Contractors failed to submit final vouchers in
        accordance with FAR 52.216-7(d)(5).
Rescinding Direct Billing Authority

However:
   A contractor with delinquent final vouchers may
   continue to participate if it submits to the
   contracting officer for approval, with a copy to
   DCAA, an acceptable plan to get current.


 FAO’s will rescind direct billing if the plan is
 rejected by the CO and an extension is not
 granted.
Rescinding Direct Billing Authority

   FAO is required to provide the contractor and
    ACO with written notice of direct billing
    rescission.
   FAO will also notify paying office(s) by fax or
    email within 24 hours.
    –   Examples are available on DCAA intranet and
        APPS under Direct Billing Letters.
Rescinding Direct Billing Authority

   FAO may rescind direct billing on a contract
    by contract basis.

       For example:
          DCAA Form 1 was issued that applies to only one
           contract.
          FAO may require the contractor to submit only vouchers
           for the affected contract to DCAA for approval.
          Remaining vouchers on other contract may be submitted
           to the paying office.
Reinstated Direct Billing Authority


   DCAA can reinstate the contractor’s direct
    billing authority whenever the conditions
    causing the rescission have been resolved
    by issuing a new DCAA Authorization
    Memorandum.
            Wide Area Workflow
                  WAWF

   The DoD initiated the Wide Area Workflow
    (WAWF) Receipts and Acceptance System
    to eliminate paper transactions from the
    contracting process.
   The purpose of WAWF is to enable vendors
    and government officials to electronically
    access and process the documentation
    needed to generate payment for goods and
    services.
                         WAWF

   All vouchers should be submitted through
    WAWF unless contract terms require hard
    copy vouchers to be submitted.

   Contractors can submit vouchers through
    WAWF even though they are not approved
    for direct billing.
    –   Vouchers will be submitted to DCAA first for
        approval and then to DFAS for payment.
Questions?

								
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