Lesson 6: Risk Management of Performance-Based Payments

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Lesson 6: Hazard Administration of Execution Based Installments. What We Will Realize. Snappy audit of danger administration and how it applies to PBPs Potential expanded danger circumstances . Hazard Administration . The craft of keeping up an equalization.

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Slide 1

Lesson 6: Risk Management of Performance-Based Payments

Slide 2

What We Will Learn Quick audit of hazard administration and how it applies to PBPs Potential expanded hazard circumstances DCMA Contract Financing – PBPs

Slide 3

Risk Management The craft of keeping up an adjust Facilitating temporary worker execution to guarantee quality, convenient item to clients Limiting danger DCMA Contract Financing – PBPs

Slide 4

Risk Management Review of contractual worker key procedures, for example, Management of PBP ask for readiness and submittal Management of provider money related condition Successful fulfillment of execution occasions DCMA Contract Financing – PBPs

Slide 5

Risk Management: Considerations Pre-Award Survey Development of PBP terms Postaward Orientation Conference Type of specialized assessments/approvals that must happen DCMA Contract Financing – PBPs

Slide 6

Risk Management (cont'd) Identify and examine key ranges inside the contractual worker's PBP procedure Are they satisfactory to compute, get ready, and substantiate PBPs? DCMA Contract Financing – PBPs

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Risk Management (cont'd) ACO must consider: Past and current execution and unwavering quality Experience Quality of administration Other traits recognized by the CMO PBP Team Any uncommon conditions (i.e., Conversion from Progress Payment to PBPs, contract with diminished or suspended PBPs) DCMA Contract Financing – PBPs

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Risk Management (cont'd) See FAR 32.1007(c) for survey criteria Periodic Reviews Financial condition survey is performed in way like Progress Payments Ensure no encumbrances to property depicted in passage (f) of FAR 52.232-32 DCMA Contract Financing – PBPs

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Risk Management Tools Process sealing Systems assessments Data investigation Audits DCMA Contract Financing – PBPs

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Risk Management Resources MOCAS Technical surveys and occasion finishing approvals Review and endorsement of PBP Request Liquidation application and conformity, if suitable Payment Verification/Validation DCMA Contract Financing – PBPs

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Risk Management (cont'd) Monitoring of hazard incorporates Financial Capability Reviews Subcontractor Payment Consistency Production Reviews CMO continuous examination and proposals DCMA Contract Financing – PBPs

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Risk Management (cont'd) ACO ought to hold the accompanying documentation: PBP exchanges and correspondence Reports and data (i.e., from DCAA, DACO, different ACOs, and authorities, and so on.) Risk investigation Risk observing outcomes Updates as pertinent DCMA Contract Financing – PBPs

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Potential Increased Risk Situations Liquidation blunders Delegation of PBP transactions Reduction or suspension of PBPs Conversions from Progress Payments to PBPs DCMA Contract Financing – PBPs

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Conversion: PP to PBP Contracts can't contain both Progress Payment (PP) and PBP arrangements; be that as it may, contracts can be altered to change over from PPs to PBPs Liquidation plans and related matters are of essential concern when changing over from PP to PBPs DCMA Contract Financing – PBPs

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Conversion: PP to PBP (cont'd) Conversion alteration must give guidelines on the most proficient method to sell all unliquidated PPs Liquidation Options: Instruct contractual worker to reimburse unliquidated PPs Re-allot past PPs by means of modification Instruct paying office to take counterbalance against first PBP receipt DCMA Contract Financing – PBPs

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Conversion: PP to PBP (cont'd) Liquidation alternatives (proceeded with) Incorporate past PPs into the primary PBP occasion DCMA Contract Financing – PBPs

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ACO Negotiation of PBPs PCO may designate transaction of: Performance criteria Successful occasion fulfillment Event esteem DCMA Contract Financing – PBPs

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PBP Reduction-Suspension ACO may lessen or suspend PBPs when temporary worker: Fails to follow material necessity of the agreement Fails to advance Becomes monetarily unsound Is reprobate in paying subcontractors Reduction/suspension gone up against PBP ask for DCMA Contract Financing – PBPs

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Communicate ACO ought to advise the client if temporary workers: Fail to meet booked execution occasion Jeopardize contract consummation because of money related disintegration Enter into a monetary assention burdening property title DCMA Contract Financing – PBPs

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What We Learned Risk administration procedures Some circumstances have expanded hazard potential Liquidation mistakes Delegation of PBP arrangements Reduction or suspension of PBPs Conversions from Progress Payments to PBPs DCMA Contract Financing – PBPs

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