12. Impact on the Government and Contracting Community

Comment: A respondent stated that long-term withholds will hurt the Government and contracting community. Some system deficiencies can be corrected almost immediately, leaving the withhold in place until DCAA completes its follow-up audit. According to the respondent, reducing the percentage of the withhold to half of the initial percentage will still place contractors in a financial crisis. The respondent stated that contractors will have to increase their bids to cover potential withholds, which would increase the overall price to the Government.

Response: Both the contractors' and the Government's administrative costs should be reduced in the long run with the reliance on efficient contractor business systems.