February 17, 2014

Watch Emails In Procurement Files!

I'd like to discredit a common misconception regarding file documentation up front: Thick files DO NOT NECESSARILY EQUAL compliant files. 

An antiquated approach to dealing with auditors goes something like this: Inundate them with reams of documentation. Put them in a cramped room with no AC in the summer. Sweat them out and they'll leave before they can find anything.

Here's how CPSRs work now: Put DCMA in a cramped room with no AC? They'll demand to be moved. The room will also need a printer, fax, internet access, a phone that dials out and a lock. Inundate them with paperwork? Okay - CPSR is extended and more analysts may be called in to pick up the slack. 

Fat files don't scare auditors - they anger them! Some of my roughest reviews came out of ridiculously thick files filled with reams of email communication. Is that because I was angry?

Actually no. They were rough because email strings are treasure troves of noncompliance. Real life example:

I worked for a client as part of a consulting company a few years ago. The Friday before the review commenced we asked the client to have all $500K+ files in the DCMA audit area ready for review. We'd been working for months on remediative efforts - time to tab, stack and go!

When the files showed up 9am Monday, several of the ID/IQ files got mysteriously ... bigger. Like, an extra hundred pages a piece. No time for questions, in-brief started. Deep breath and let's dive in.

As the questions started coming in on those "fat" files we found out what happened - the SCA, in a bit of a panic, decided to print out ALL of her emails from the proposal evaluation stage (which no one had seen during pre-CPSER review) and shoved them into the file Friday night. She was worried that her files weren't big enough to impress the auditors. The problem - the files documented a competitive ID/IQ price analysis. However the emails that were a late add included conversations between BD and subs where target rates were provided to the subs prior to their price proposal submissions.

All of a sudden, the first 10 files DCMA reviewed (all part of the same ID/IQ prime) were deemed noncompetitive. 10 TINA violations before lunch on the first day.

What's to learn from that story?

1. Emails are dangerous. Emails should ONLY be included in a file when they fulfill a documentary requirement. DPAS acceptance; information from a sub regarding commerciality of a proposed item; approval or time stamp for a time-sensitive document, etc. Extraneous parts of the string should be cut.

2. Don't hide things during the remediation process! Mistakes happen. They get exponentially worse when the mistakes are a surprise to the contractor during a review. You can get leniency for mistakes with disclosure and proposed corrective action, but it can be disaster if DCMA finds something you're trying to hide.