12.  Payment Withholdings Applied Per System or Per Deficiency

Comment: The rule is unclear whether a 5% payment withholding is applied against a single deficient business system or can be applied for each deficiency within a single system.

Response: Payment withholding procedures will be implemented on the basis of contractor business systems. While multiple payment withholdings may be implemented due to significant deficiencies in multiple contractor business systems, for clarity, the interim rule sets forth that the total percentage of payments withheld on amounts due under each progress payment, performance-based payment, or interim cost voucher, shall not exceed five percent for one or more significant deficiencies in any single contractor business system, and 10 percent for significant deficiencies in multiple contractor business systems.