5.  Definition of Deficiency

Comment: The term "deficiency" is not clearly defined. The rule should define the terms "deficiency," "significant deficiency," and "material weakness." One respondent suggested these definitions be set forth in accordance with the definitions utilized by the Public Company Accounting Oversight Board (PCAOB).

Response: The interim rule has been revised to implement payment withholding procedures only for "significant deficiencies," therefore, it is not necessary to define "deficiency". The rule is has been revised to define "significant deficiency" as a shortcoming in the business system that affects materially the ability of officials of the Department of Defense to rely upon information produced by the system that is needed for management purposes, in accordance with section 893 of the NDAA. DoD will use the definition of "significant deficiency" in section 893 over the PCAOB definition. The term "material weakness" is not used in this rule.