10.  Other Remedies

Comment: The DCAA audit report should recommend whether a payment withholding is necessary, and if not, what other protections are available. DoD already has numerous other contracting tools available to protect itself from any actual loss associated with business system deficiencies. The proposed clause should state that a payment withholding under the clause is in lieu of, and not in addition to, other sanctions and remedies.

Response: The existing regulatory remedies are not an effective substitute for a contract clause that will mitigate the Government's risk while contractors correct business system deficiencies. The interim rule is required to supplement existing enforcement mechanisms and protect the Government's interests while the contractor completes correction of system deficiencies. DoD does not want to limit the contracting officer's discretion to apply any and all regulatory measures, as warranted by the circumstances. For example, if a contractor has a deficiency in its property management system, the contracting officer may implement a payment withholding to protect the Government's risk of the contractor failing to perform on the contract, and may also revoke the Government's assumption of liability to rotect the Government from risk of loss of the Government's furnished property.