Common use of MMAS standards Clause in Contracts

MMAS standards. The MMAS shall have adequate internal controls to ensure system and data integrity, and shall— (1) Have an adequate system description including policies, procedures, and operating instructions that comply with the FAR and Defense FAR Supplement; (2) Ensure that costs of purchased and fab- ricated material charged or allocated to a contract are based on valid time-phased re- quirements as impacted by minimum/eco- nomic order quantity restrictions. (i) A 98 percent bill of material accuracy and a 95 percent master production schedule accuracy are desirable as a goal in order to ensure that requirements are both valid and appropriately time-phased. (ii) If systems have accuracy levels below these, the Contractor shall provide adequate evidence that— (A) There is no material harm to the Gov- ernment due to lower accuracy levels; and (B) The cost to meet the accuracy goals is excessive in relation to the impact on the Government; (3) Provide a mechanism to identify, re- port, and resolve system control weaknesses and manual override. Systems should iden- tify operational exceptions such as excess/re- sidual inventory as soon as known; (4) Provide audit trails and maintain records (manual and those in machine read- able form) necessary to evaluate system logic and to verify through transaction test- ing that the system is operating as desired; (5) Establish and maintain adequate levels of record accuracy, and include reconcili- ation of recorded inventory quantities to physical inventory by part number on a peri- odic basis. A 95 percent accuracy level is de- sirable. If systems have an accuracy level below 95 percent, the Contractor shall pro- vide adequate evidence that— (i) There is no material harm to the Gov- ernment due to lower accuracy levels; and (ii) The cost to meet the accuracy goal is excessive in relation to the impact on the Government; (6) Provide detailed descriptions of cir- cumstances that will result in manual or system generated transfers of parts; (7) Maintain a consistent, equitable, and unbiased logic for costing of material trans- actions as follows: (i) The Contractor shall maintain and dis- close written policies describing the transfer methodology and the loan/pay-back tech- nique. (ii) The costing methodology may be standard or actual cost, or any of the inven- tory costing methods in 48 CFR 9904.411– 50(b). The Contractor shall maintain consist- ency across all contract and customer types, and from accounting period to accounting period for initial charging and transfer charging. (iii) The system should transfer parts and associated costs within the same billing pe- riod. In the few instances where this may not be appropriate, the Contractor may accom- plish the material transaction using a loan/ pay-back technique. The ‘‘loan/pay-back technique’’ means that the physical part is moved temporarily from the contract, but the cost of the part remains on the contract. The procedures for the loan/pay-back tech- nique must be approved by the ACO. When the technique is used, the Contractor shall have controls to ensure— (A) Parts are paid back expeditiously; (B) Procedures and controls are in place to correct any overbilling that might occur; (C) Monthly, at a minimum, identification of the borrowing contract and the date the part was borrowed; and (D) The cost of the replacement part is charged to the borrowing contract; (8) Where allocations from common inven- tory accounts are used, have controls (in ad- dition to those in paragraphs (e)(2) and (7) of this clause) to ensure that— (i) Reallocations and any credit due are processed no less frequently than the routine billing cycle; (ii) Inventories retained for requirements that are not under contract are not allocated to contracts; and (iii) Algorithms are maintained based on valid and current data; (9) Have adequate controls to ensure that physically commingled inventories that may include material for which costs are charged or allocated to fixed-price, cost-reimburse- ment, and commercial contracts do not com- promise requirements of any of the stand- ards in paragraphs (e)(1) through (8) of this clause. Government-furnished material shall not be— (i) Physically commingled with other ma- terial; or (ii) Used on commercial work; and (10) Be subjected to periodic internal re- views to ensure compliance with established policies and procedures. (End of clause) [65 FR 77834, Dec. 13, 2000, as amended at 70 FR 67921, Nov. 9, 2005; 74 FR 37648, July 29, 2009] As prescribed in 243.205–70, use the following clause: PRICING OF CONTRACT MODIFICATIONS (DEC 1991) When costs are a factor in any price ad- justment under this contract, the contract cost principles and procedures in FAR part 31 and DFARS part 231, in effect on the date of this contract, apply. (End of clause) [56 FR 36479, July 31, 1991, as amended at 66 FR 49865, Oct. 1, 2001] As prescribed in 243.205–71, use the following clause: REQUESTS FOR EQUITABLE ADJUSTMENT (MAR 1998) (a) The amount of any request for equi- table adjustment to contract terms shall ac- curately reflect the contract adjustment for which the Contractor believes the Govern- ment is liable. The request shall include only costs for performing the change, and shall not include any costs that already have been reimbursed or that have been separately claimed. All indirect costs included in the request shall be properly allocable to the change in accordance with applicable acqui- sition regulations. (b) In accordance with 10 U.S.C. 2410(a), any request for equitable adjustment to con- tract terms that exceeds the simplified ac- quisition threshold shall bear, at the time of submission, the following certificate exe- cuted by an individual authorized to certify the request on behalf of the Contractor: I certify that the request is made in good faith, and that the supporting data are accu- rate and complete to the best of my knowl- edge and belief. llllllllllllllllllllllll (Official’s Name) llllllllllllllllllllllll (Title) (c) The certification in paragraph (b) of this clause requires full disclosure of all rel- evant facts, including— (1) Cost or pricing data if required in ac- cordance with subsection 15.403–4 of the Fed- eral Acquisition Regulation (FAR); and (2) Information other than cost or pricing data, in accordance with subsection 15.403–3 of the FAR, including actual cost data and data to support any estimated costs, even if cost or pricing data are not required. (d) The certification requirement in para- graph (b) of this clause does not apply to— (1) Requests for routine contract pay- ments; for example, requests for payment for accepted supplies and services, routine vouchers under a cost-reimbursement type contract, or progress payment invoices; or

MMAS standards. The MMAS shall have adequate internal controls to ensure system and data integrity, and shall—shall-- (1) Have an adequate system description including policies, procedures, and operating instructions that comply with the FAR and Defense FAR Supplement; (2) Ensure that costs of purchased and fab- ricated fabricated material charged or allocated to a contract are based on valid time-phased re- quirements requirements as impacted by minimum/eco- nomic economic order quantity restrictions. (i) A 98 percent bill of material accuracy and a 95 percent master production schedule accuracy are desirable as a goal in order to ensure that requirements are both valid and appropriately time-phased. (ii) If systems have accuracy levels below these, the Contractor shall provide adequate evidence that—that- (A) There is no material harm to the Gov- ernment Government due to lower accuracy levels; and (B) The cost to meet the accuracy goals is excessive in relation to the impact on the Government; (3) Provide a mechanism to identify, re- portreport, and resolve system control weaknesses and manual override. Systems should iden- tify identify operational exceptions such as excess/re- sidual residual inventory as soon as known; (4) Provide audit trails and maintain records (manual and those in machine read- able readable form) necessary to evaluate system logic and to verify through transaction test- ing testing that the system is operating as desired; (5) Establish and maintain adequate levels of record accuracy, and include reconcili- ation reconciliation of recorded inventory quantities to physical inventory by part number on a peri- odic periodic basis. A 95 percent accuracy level is de- sirabledesirable. If systems have an accuracy level below 95 percent, the Contractor shall pro- vide provide adequate evidence that—that- (i) There is no material harm to the Gov- ernment Government due to lower accuracy levels; and (ii) The cost to meet the accuracy goal is excessive in relation to the impact on the Government; (6) Provide detailed descriptions of cir- cumstances circumstances that will result in manual or system generated transfers of parts; (7) Maintain a consistent, equitable, and unbiased logic for costing of material trans- actions transactions as follows: (i) The Contractor shall maintain and dis- close disclose written policies describing the transfer methodology and the loan/pay-back tech- niquetechnique. (ii) The costing methodology may be standard or actual cost, or any of the inven- tory inventory costing methods in 48 CFR 9904.411– -50(b). The Contractor shall maintain consist- ency consistency across all contract and customer types, and from accounting period to accounting period for initial charging and transfer charging. (iii) The system should transfer parts and associated costs within the same billing pe- riodperiod. In the few instances where this may not be appropriate, the Contractor may accom- plish accomplish the material transaction using a loan/ loan/pay-back technique. The ‘‘"loan/pay-back technique’’ " means that the physical part is moved temporarily from the contract, but the cost of the part remains on the contract. The procedures for the loan/pay-back tech- nique technique must be approved by the ACO. When the technique is used, the Contractor shall have controls to ensure—ensure- (A) Parts are paid back expeditiously; (B) Procedures and controls are in place to correct any overbilling that might occur; (C) Monthly, at a minimum, identification of the borrowing contract and the date the part was borrowed; and (D) The cost of the replacement part is charged to the borrowing contract; (8) Where allocations from common inven- tory inventory accounts are used, have controls (in ad- dition addition to those in paragraphs (e)(2) and (7) of this clause) to ensure that—that- (i) Reallocations and any credit due are processed no less frequently than the routine billing cycle; (ii) Inventories retained for requirements that are not under contract are not allocated to contracts; and (iii) Algorithms are maintained based on valid and current data; (9) Have Regardless of the provisions of FAR 45.505-3(f)(1)(ii), have adequate controls to ensure that physically commingled inventories that may include material for which costs are charged or allocated to fixed-price, cost-reimburse- mentcost- reimbursement, and commercial contracts do not com- promise compromise requirements of any of the stand- ards standards in paragraphs (e)(1) through (8) of this clause. Government-furnished material shall not be—be- (i) Physically commingled with other ma- terialmaterial; or (ii) Used on commercial work; and (10) Be subjected to periodic internal re- views reviews to ensure compliance with established policies and procedures. (End of clause) [65 FR 77834, Dec. 13, 2000, as amended at 70 FR 67921, Nov. 9, 2005; 74 FR 37648, July 29, 2009] As prescribed in 243.205–70, use the following clause: PRICING OF CONTRACT MODIFICATIONS (DEC 1991) When costs are a factor in any price ad- justment under this contract, the contract cost principles and procedures in FAR part 31 and DFARS part 231, in effect on the date of this contract, apply. (End of clause) [56 FR 36479, July 31, 1991, as amended at 66 FR 49865, Oct. 1, 2001] As prescribed in 243.205–71, use the following clause: REQUESTS FOR EQUITABLE ADJUSTMENT (MAR 1998) (a) The amount of any request for equi- table adjustment to contract terms shall ac- curately reflect the contract adjustment for which the Contractor believes the Govern- ment is liable. The request shall include only costs for performing the change, and shall not include any costs that already have been reimbursed or that have been separately claimed. All indirect costs included in the request shall be properly allocable to the change in accordance with applicable acqui- sition regulations. (b) In accordance with 10 U.S.C. 2410(a), any request for equitable adjustment to con- tract terms that exceeds the simplified ac- quisition threshold shall bear, at the time of submission, the following certificate exe- cuted by an individual authorized to certify the request on behalf of the Contractor: I certify that the request is made in good faith, and that the supporting data are accu- rate and complete to the best of my knowl- edge and belief. llllllllllllllllllllllll (Official’s Name) llllllllllllllllllllllll (Title) (c) The certification in paragraph (b) of this clause requires full disclosure of all rel- evant facts, including— (1) Cost or pricing data if required in ac- cordance with subsection 15.403–4 of the Fed- eral Acquisition Regulation (FAR); and (2) Information other than cost or pricing data, in accordance with subsection 15.403–3 of the FAR, including actual cost data and data to support any estimated costs, even if cost or pricing data are not required. (d) The certification requirement in para- graph (b) of this clause does not apply to— (1) Requests for routine contract pay- ments; for example, requests for payment for accepted supplies and services, routine vouchers under a cost-reimbursement type contract, or progress payment invoices; or