18.  Release of Payment Withholdings

Comment: DCAA does not issue audits addressing "reasonable expectation that the corrective actions have been implemented." The only existing audit solution is to complete the entire follow-up audit, which will not be performed in a timely manner due to DCAA's backlog. Furthermore, the rule should provide guidance to avoid perpetual payment withholdings when deficiencies in multiple business systems overlap and the timing of corrective action plans differ.

Response: There is no requirement that DCAA issue audits addressing "reasonable expectation that the corrective actions have been implemented." The interim rule explicitly states that prior to the receipt of verification, the contracting officer may discontinue withholding payments pending receipt of verification, and release any payments previously withheld, if the contractor submits evidence that the significant deficiencies have been corrected, and the contracting officer, in consultation with the auditor or functional specialist, determines that there is a reasonable expectation that the corrective actions have been implemented. Since payment withholding procedures will be implemented on the basis of contractor business systems, if prior to the correction of one or more significant deficiencies, other significant deficiencies are identified in another business system, the contracting officer may revise the original final determination or issue a subsequent determination to disapprove the latter business system and implement additional payment withholdings. Contracting officers will provide direction in their determination(s), identify the significant deficiencies that need to be corrected in order to approve each disapproved business system, and discontinue the withholding of payments and release any payments previously withheld. If one previously disapproved contractor business system is approved, but significant deficiencies remain in another system, the contracting officer will continue to withhold payments relating to the remaining disapproved business system until the significant deficiencies relating to that business system have been determined to have been corrected.