February 17, 2014

To Memo or Not to Memo - THAT is the question!

Many consultants (and the companies that hire them) go forward with one clear and predominant message - over-documentation is better under-documentation. A fat file is better than a skinny file Flood them with enough paperwork and you might luck out and have the auditor throw up their hands in defeat!

If you read my posts in this group, you'll already know my stance on this approach (hint - it's not good!). So what about all the memos you have in your files? The exception and "mea culpa" memos you defer to during remediation to let DCMA know you're working on the fixes ... those have to be worthwhile, right?

Well ... it depends. Here's my take on two popular procurement file memo types:

Mea Culpa Memos - these are the memos that contractors feel as if they HAVE to put in a file when they have a potential noncompliance: "Gee DCMA, we're sorry we missed TINA on this one, but we promise we'll do better next time!" Two big problems with these memos - they are poorly timed and often lack sufficient detail to make them useful. DCMA generally wants to know: Why did you miss TINA? What remedial action was taken? What are the guarantees this will never happen again? If you reduce these to memorandum format in the file prior to your CPSR (a) you've committed to them (b) without DCMA approval or knowledge that those remediative steps were adequate. 

The best times to discuss noncompliance with DCMA are (in chronological order): (1) live and in person with your team during the daily 3pm meetings; (2) With the team and your ACO during the out-brief; and (3) During the Report and Response phase. These should be conversations, not memos to file. Conversations are temporary and can be revised in the moment - memos are forever and must be removed to be changed.

The BIGGER problem with these memos is - they guarantee your company findings during a CPSR. What are the chances a reviewer misses an episode of TINA noncompliance? Without a neon arrow pointing it out - who knows. With the magic neon arrow of a memo? 0%. And if you plead "No Contest" in your file documentation you've severely limited your wiggle room during the response phase of the review. 

Exception Memos: In general, reviewers don't need a memo describing an exception to public law compliance - they know what laws apply by seeing the value of the file; the contract type awarded; the DPAS rating applicable; the results of price analysis and the size of the sub. As a reviewer, I REALLY scrutinize exception memos. Is the company still using inapplicable exceptions to CAS (foreign subcontractors) TINA (no requirement to submit a cert at prime level) and Consent (T&M or LH award) in their memos? Then those files will be noncompliant and the memo was the cause! And my life as a reviewer just got easy - auditors pray for smoking guns that eliminate the need for them to do ACTUAL work! And many companies make personnel work weekends to provide them!

Back to the hypothetical reviewer - once they see the sub is a SB, do they need a memo explaining that the small business is exempt from CAS? Not really. Defer instead to a solid Award Summary to take the place of exemption memos. A good AS also provides the reviewer with a one stop shop to calibrate their expected findings. Never do in 5 documents what you could do in one!