The Federal Acquisition Service’s (FAS’s) Customer Assistance Visits (CAVs): How to know if a CAV is an audit? If the authority cited for the CAV is an audit clause; if the CAV document review looks like an audit; and if the CAV compliance assessment questions look like an audit; the CAV just might be audit!!
As FAS continues to reorganize around Category Management to support its customer base, the role of FAS support operations has been evolving as well. FAS support operations like IT systems, contract management and procurement policy are changing—changes that will impact both customer agencies and contractors. A case in point is the role of the CAV program.
To its credit, FAS has been open in communicating with MAS contractors regarding the changing CAV visit process. The Supplier Management Division that is responsible for the CAV visits has presented to the Coalition on a number of occasions outlining changes to the process and what MAS contractors can expect. FAS is seeking to streamline the CAV process. Supplier Management had been conducting full CAV visits in Year 2 and Year 4 of each five year base for contractors exceeding $150,000. According to the Supplier Management Division, moving forward a full CAV will be conducted at the end of each five year contract period for all MAS contractors. In addition, a more limited CAV will be conducted annually for MAS contractors with $150,000 or more in sales in the last four reporting quarters. The Supplier Management Division is also looking to conduct more “virtual” CAVs.
Amidst the ongoing changes in the CAV process, MAS contractors should navigate the process with a fundamental understanding that despite FAS’s statements to the contrary, the full CAV has the look and feel of an audit. A review of the documents provided to MAS contractors as part of the full CAV process makes that clear. The documentation includes:
- A copy of GSAR Clause 552.215-71, EXAMINATION OF RECORDS BY GSA (MULTIPLE AWARD SCHEDULE) (JUL 2003). This is the clause that establishes audit authority for all MAS contracts.
- A “Contract Assessment Documentation – End of Term –Complete Assessment.” The instruction document outlines “a list of documents that are needed in order for a Multiple Award Schedules contractor to display their successful contract adherence during the assessment process. The artifacts, including system documentation, that are to be available for review include:
(1) The contract—
(2) Trade Agreements Act documentation;
(3) Basis of Award documents;
(4) Sales data/Scope of Contact documents;
(5) Participating Dealers documents;
(6) Pricing and Prompt Payment documents;
(7) Environmental information;
(8) Delivery information;
(9) Contractor Teaming Agreements (CTAs);
(10) Blanket Purchase Agreements (BPAs); and
(11) Novation or Name Change documents, as applicable.
- A “Contract Assessment Guide” that outlines typical questions for each area of compliance. These instructions and questions correspond to the 11 compliance areas identified in the “Contract Assessment Document” as listed above. The guide includes at least 40 questions/topics to be addressed by the contractor.
It is a best practice for sound government contract management that MAS contractors independently conduct periodic reviews for compliance with their MAS contracts. And, as originally intended CAVs were to assist contractors in improving overall contract performance. Today CAV visits are relied upon by FAS for any number of contract administration actions/engagements with MAS contractors. In addition, CAVs can lead to a referral to the Inspector General’s Office for further audit and/or investigation. That why prudent MAS contractors spend hundreds of hours and thousands of dollars preparing for a CAV visit.
Recently, FAS began asking MAS contractors to acknowledge and sign a “Notice Regarding Purpose and Parameters of Industrial Operations Analyst (IOA) Contactor Assistance Visits (CAVs).” Interestingly, the notice states in part:
The CAV is NOT an audit, nor is it intended to be a comprehensive review of the contractor’s past and current compliance with any of the terms and conditions associated with the GSA MAS contract. Accordingly, an IOA’s failure to identify any past or current contract compliance issue does not constitute a finding of full compliance with the contract or government contracting regulations. . . . Because of the limited scope of the CAV visit and Report Card, nothing contained in the Report Card, or any documentation or action pertaining to the IOA CAV, precludes any claim presented by GSA or the United States relating to the contract.
The notice also includes a “summary of differences between an OIG Audit and IOA CAV visit. The requirement to acknowledge/sign this notice appears to be a reaction to the civil false claims act case, United States ex rel. Folliard v. Govplace, March 13, 201. In Folliard the plaintiff alleged Trade Agreements Act violations in performance of Govplace’s MAS contract. In granting summary judgment in favor of the defendant Govplace, the United States Court of Appeals for the DC Circuit found that Govplace reasonably relied on country of origin data received from its supplier. The Court also cited or recognized the fact that over the course of six years of IOA visits, GSA had never cited or criticized Govplace regarding its TAA compliance.
As noted above, GSA relies on IOA visits for any number of contract administration purposes including referral to the Inspector General’s Office. At the same time MAS contractors dedicate significant time, money and resources in preparing for and participating in a CAV. Given the comprehensive nature of the review and as a matter of fundamental fairness MAS contractors, should be able rely on positive CAV results. Before signing the notice, it would be prudent for contractor personnel to assure that appropriate company officials and/or counsel are aware of the requirement to sign this notice.
We urge GSA to continue its efforts to stream line the CAV process. Just as importantly, given the reorganization of FAS based on Category Management, perhaps it is time to consider a reorganization of the audit/review functions across GSA. More on that in a future blog.