DCMA Draft Corrective Action Policy

1. DCMA Draft Corrective Action Policy Presented By: Dave Ryan June, 2012

2. Draft Instruction • Establishes procedures to be used by all functional elements to address and resolve contract non-compliances/deficiencies • The intent is for Contract Management Office (CMO)/Center leadership to be fully engaged in all aspects of the corrective action process, from identification of deficiencies to issuance of Corrective Action Requests (CARs) and continuous oversight and validation of contractor corrective and preventive actions.

3. General Policy • CAR eTool mandated for all Corrective Action Requests • For Level III and IV CARs, the ACO is responsible for issuance of the CAR, acceptance of contractor corrective action plans, and CAR closure. The ACO works closely with the functional specialist throughout the corrective action process. • Where appropriate, the data analysis of CARs should be reviewed and discussed in CMO, sector, and corporate level Management Councils.

4. Contractor Identified Non-compliances • CAR is not necessary if a contractor self-identifies a deficiency and takes timely, appropriate action to correct it. • A subsequent DCMA determination of ineffective contractor corrective actions should result in issuance of a CAR.  • CARs issued for repetitive issues disclosed by a contractor should cite a weakness in the contractor’s corrective action process.

5. Concurrently Identified Non-compliance When a contractor participates in a PMSA, CARs shall be issued for identified non-compliances.

6. Concurrently Identified Non-compliance • When DCMA’s PMSA is accomplished concurrently with contractor’s self assessment, CARs shall be issued only after the contractor has determined whether there is a deficiency and only when the GPA observes the contractor’s failure to properly conduct the self assessment or to accurately document the result. • A deficiency properly recorded by the contractor will not be cause for corrective action notification by the PA, provided the contractor corrects the deficiency in a timely manner. 

7. CAR Levels • The level of the CAR depends on the significance of the non-compliance and the level of contractor management engagement required. • Lower level CARs need not be issued prior to higher level CAR issuance.

8. Level I CARs Issued for deficiencies that are minor in nature, are promptly corrected by the contractor, and present no need for root cause determination or further preventive action.   Issued to the contractor management level responsible for correcting the cited deficiency.  Intended for on-the-spot type corrective actions. While the contractor must correct the deficiency, further actions are not required.

9. Level II CARs • Issued for deficiencies that are not promptly correctable and warrant root cause analysis andpreventive action, or need action by the contractor to determine if other processes are affected. • Directed to the contractor management level responsible for initiating corrective actions.  • A written response from the contractor is required.

10. Level III CARS • Issued for significant deficiencies as defined in DFARS 252.245-7003, a failure to respond to a lower level CAR, or to remedy recurring non-compliances. • Issued to the contractor's management responsible for the company or business segment. • A written response from the contractor is required. The CAR will result in a review of contractual remedies, such as reductions of payments, cost disallowances, revocation of government assumption of risk of loss, or business management systems disapprovals, etc.

11. Level IV CARs Issued when a Level III CAR has been ineffective and the contractual non-compliance(s) is of a serious nature. Issued to the contractor's segment or corporate management. A written response from the contractor is required. The CAR will result in a mandatory review of potential contractual remedies, such as cost disallowance, reduction or suspension of payments, or suspension of product acceptance activities. This review will be implemented in accordance with applicable FAR/DFARS policies and procedures.

12. CARs and Business Systems • If the Contracting Officer determines the non-compliance is not significant, the Property Administrator will pursue corrective action by issuing a Level II CAR. • The Contracting Officer issues a Level III CAR to pursue the correction of significant deficiencies.

13. Initial Determinations and CARs If there are one or more significant deficiencies, the CO will make an initial determination and notify the contractor in writing. The significant deficiency shall also be documented in a draft Level III or higher CAR attached to the CO’s initial determination letter.

14. CAP Requirements • Root Cause of the deficiency • Corrective Action taken or planned to eliminate the cause(s) and prevent recurrence of the deficiency, to include addressing people, process, and/or tools as indicated. • Actions taken to correct the specific deficiency • Determination of whether other processes are affected by the identified root cause(s) • Target date(s) for implementation of planned actions

15. Any Questions?