19. Application of Withholdings

Comment: A respondent suggested that the final rule should explicitly limit the contracting officer's discretion to apply withholdings against only those contracts and invoices that could be affected by the identified system deficiency.

Response: The contracting officer has the sole discretion to identify covered contracts containing the clause at DFARS 252.242-7005, against which to apply payment withholds. DFARS 252.242-7005(d) limits implementation of a payment withhold for significant deficiencies in a contractor business system required under a contract. However, this does not limit the contracting officer's discretion to apply withholds against only those contracts and invoices that could be affected by the identified system deficiency.