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 PERFORMANCE WORK STATEMENT (PWS) Defense Advanced Research Projects Agency (DARPA) Office of the Comptroller (COMP) Audit Readiness Support *Note that this sample has been revised from the source document on the Government Point of Entry as necessary to align formatting and applicable FAR procedures.* 1. GENERAL: This is a non-personal services contract to provide audit readiness support services. The Government shall not exercise any supervision or control over the contract service providers performing the services herein. Such contract service providers shall be accountable solely to the contractor who, in turn, is responsible to the Government. 1.1. Description of Services/Introduction: The contractor shall provide all personnel, equipment, supplies, facilities, transportation, tools, materials, supervision, and other items and non-personal services necessary to perform audit readiness support services as defined in this Performance Work Statement except for those items specified as government furnished property and services. The contractor shall perform to the standards in this contract. 1.2. Background: The Defense Advanced Research Projects Agency (DARPA) was created as the Advanced Research Projects Agency (ARPA) by Public Law 85-325 and DoD Directive 5105.41, in February 1958. DARPA is a separate agency under the Office of the Secretary of Defense, reporting to the Under Secretary of Defense for Research and Engineering. DARPA’s technical program offices manage the large majority of DARPA's funds. The offices manage both broad, basic technology programs and projects that prepare the way for major programs to demonstrate future defense systems. In 2017, in accordance with the 2010 National Defense Authorization Act (NDAA), Section 1003, the Financial Improvement and Audit Readiness (FIAR) Directorate merged the Departments financial improvement and audit objectives with the Office of Management and Budget (OMB) Circular A-123, Appendix A “Internal Control over Financial Reporting” requirements. Specifically, as defined by the FIAR guidance, DARPA is now required to issue a Statement of Assurance (SOA) on Internal Controls over Financial Reporting (ICOFR), and Internal Controls over Financial Systems (ICOFS) as a subset of its Annual Federal Financial Management Improvement Act (FFMIA) Statement of Assurance (SOA) reporting process. Furthermore, DARPA and its contract service providers must focus on improving controls and processes supporting information that is most often used by management, while continuing to work toward financial, information technology, and supporting documentation improvements that facilitate the achievement of unmodified audit opinions on its financial statements. To support the Department’s audit priorities and strategy, DARPA is required to perform procedures stipulated in Appendix A in accordance with OMB and as prescribed by the FIAR guidance. The DARPA Manager’s Internal Control Program has overall responsibility for preparation of the paragraphs in the SOA that address the ICOFR/ICOFS and to monitor the FIAR guidance and OMB Circular A-123 implementation process. The FIAR guidance identifies critical capabilities, which must be achieved by each component in order to assert audit readiness. Audit readiness is defined as having the capabilities in place to allow an auditor to scope and perform a full financial statement audit that results in actionable feedback. Assertion of audit readiness is based on overall progress against the critical capabilities as defined by the Office of the Under Secretary of Defense (Comptroller). 1.3. Objectives: a. Successful audits resulting from the implementation of lessons learned in compliance with the NDAA. b. Improvement of information and processes supporting auditable statements for the financial information that is most often used to manage the Department of Defense. c. Incorporate FIAR guidance with the following areas: i. Incorporating guidance on the appropriate use of sub-allotments; ii. Aligning the FIAR methodology to merge revised requirements of OMB Circular No. 123, Management’s Responsibility for Enterprise Risk Management and Internal Controls; iii. Incorporating guidance on requirements of Statement of Standards for Attestation Engagements (SSAE) No. 18 relating to service provider controls; and iv. Property policy and implementation. 1.4. Scope: The contractor shall provide support services to include: ? Accounting Operations, Financial Management and Budget Execution Support for DARPA with Financial Analysis; ? Document Preparation, Reporting; ? Internal and External Accounting Record Reconciliation Support; ? Review of Reported Amounts for Selected Financial Statement Accounts; ? Assertion Process and Internal Control over Financial Reporting (ICOFR); and, ? Internal Controls over Financial Systems (ICOFS). 1.5. Period of Performance: The period of performance shall be for one (1) Base Period of 12 months and four (4) 12-month option periods. The period of performance is as follows: Transition-In: 4 October 2018 to 3 November 2018 Base Period: 4 November 2018 to 3 October 2019 Option Period One: 4 October 2019 to 3 October 2020 Option Period Two: 4 October 2020 to 3 October 2021 Option Period Three: 4 October 2021 to 3 October 2022 Option Period Four: 4 October 2022 to 3 October 2023 1.6. General Information: 1.6.1. Quality Control: The contractor shall develop and maintain an effective quality control program to ensure services are performed in accordance with this PWS. The contractor shall develop and implement procedures to identify, prevent, and ensure non-recurrence of defective services. The contractor’s quality control program is the means by which it assures that the contractor’s work complies with the requirement of the contract. The Quality Control Plan (QCP) shall be delivered via electronic mail within 30 days of contract award. Amendments/changes to the QCP shall be delivered to the Contracting Officer Representative (COR) and Contracting Officer within three business days following any change. 1.6.2. Quality Assurance: The Government shall evaluate the contractor’s performance under this contract in accordance with the Quality Assurance Surveillance Plan. This plan is primarily focused on what the Government must do to ensure that the contractor has performed in accordance with the performance standards. It defines how the performance standards will be applied, the frequency of surveillance, and the minimum acceptable defect rate(s). 1.6.3. Recognized Holidays and Unscheduled Closures: The contractor is not required to perform service on the following Federal holidays: New Year’s Day Labor Day Martin Luther King Jr.’s Birthday Columbus Day President’s Day Veteran’s Day Memorial Day Thanksgiving Day Independence Day Christmas Day As defined in DARPA Instruction No. 58, in the event of a Government site shutdown such as a result of inclement weather, the Contractor is authorized to engage in contracting training activities or telework offsite if the Contractor has a written telework policy, reviewed and approved by the Contracting Officer. 1.6.4. Hours of Operation: The contractor is responsible for conducting business between the core hours of 9:00 AM to 3:00 PM, arriving no earlier than 6:30 AM and departing no later than 6:30 PM Monday through Friday, except Federal holidays or when the Government facility is closed due to local or national emergencies, administrative closings, or similar Government directed facility closings. The contractor must at all times maintain an adequate workforce for the uninterrupted performance of all tasks defined within this PWS when the Government facility is not closed for the above reasons. When hiring personnel, the contractor shall keep in mind that the stability and continuity of the workforce are essential. 1.6.5. Place of Performance: The work to be performed under this contract will be performed in three distinct locations: ? DARPA Headquarters in Arlington, VA ? The Defense Finance and Accounting Service (DFAS) Indianapolis, IN Center ? The DFAS Columbus, OH Center A Government provided office space will be provided in each location. The team located in Indianapolis will work both onsite and offsite at the contractor location and onsite at DFAS location. The team located in Columbus will work onsite at DFAS location. Contractor personnel may be requested to work at the Government’s alternate locations during emergencies and emergency exercises. Individual contractor personnel may be designated as essential personnel to support contingency operations at alternate Government locations during actual emergencies and emergency exercises. 1.6.6. Type of Contract: this is a firm-fixed-price task order. 1.6.7. Security Requirements: Unless stated elsewhere all contractor personnel performing work under this contract must have and maintain no lower than an interim SECRET security clearance. The security requirements are in accordance with the attached DD Form 254, DoD Contract Security Classification Specification, which will be provided to the contractor upon award of the contract. The contractor shall comply with all security policies and procedures that apply to DoD and DARPA. Security procedures shall be made available to contractor personnel. 1.6.7.1. Physical Security: The contractor shall be responsible for safeguarding all government equipment, information, and property provided for contractor use. At the close of each work period, government facilities, equipment, and materials shall be secured. 1.6.7.2. Key Control: The contractor shall establish and implement methods to ensure that all keys/key cards issued to the contractor by the Government are not lost or misplaced and are not used by unauthorized persons. NOTE: All references to “keys” include key cards. No keys issued to the contractor by the Government shall be duplicated. The contractor shall develop procedures covering key control that shall be included in the Quality Control Plan. Such procedures shall include turn-in of any issued keys by personnel who no longer require access to locked areas. The contractor shall immediately report any occurrences of lost or duplicate keys/key cards to the Contracting Officer. The contractor shall prohibit the use of Government issued keys by any persons other than the contractor’s personnel. The contractor shall prohibit the opening of locked areas by contractor personnel to permit entrance of persons other than contractor personnel engaged in the performance of assigned work in those areas, or personnel authorized entrance by the Contracting Officer. 1.6.7.3. Lock Combinations. The contractor shall establish and implement methods of ensuring that all lock combinations are not revealed to unauthorized persons. The contractor shall ensure that lock combinations are changed when personnel having access to the combinations no longer have a need to know such combinations. These procedures shall be included in the contractor’s Quality Control Plan. 1.6.8. Special Qualifications: Contractor personnel will be required to sign a Non-Disclosure Agreement. 1.6.9. Post-Award Conference/Periodic Progress Meetings: The contractor agrees to attend any post award conference convened by the contracting activity or contract administration office in accordance with Federal Acquisition Regulation Subpart 42.5. The Contracting Officer, COR, and other Government personnel, as appropriate, may meet periodically with the contractor to review the contractor’s performance. At these meetings, the Contracting Officer will apprise the contractor of how the Government views the contractor’s performance. The contractor will also notify the Government of problems, if any, being experienced. Appropriate action shall be taken to resolve outstanding issues. These meetings shall be at no additional cost to the Government. 1.6.10. Contracting Officer Representative (COR): The COR monitors all technical aspects of the contract and assists in contract administration. A letter of designation issued to the COR, a copy of which is sent to the contractor, states the responsibilities and limitations of the COR, especially with regard to changes in cost or price, estimates or changes in delivery dates. The COR is not authorized to change any of the terms and conditions of the resulting contract. 1.6.11. Key Personnel: See Attachment 1A. 1.6.12. Identification of Contractor Personnel: All contract personnel attending meetings, answering Government telephones, and working in other situations where their contractor status is not obvious to third parties are required to identify themselves as such to avoid creating an impression in the minds of members of the public that they are Government officials. They must also ensure that all documents or reports produced by contractors are suitably marked as contractor products or that contractor participation is appropriately disclosed. Contractor personnel will be required to obtain, use, and display a Common Access Card in the performance of this contract. 1.6.13. Contractor Travel: See Attachment 1A. 1.6.14. Other Direct Costs: This category includes travel (outlined in Attachment 1A), reproduction, and shipping expenses associated with training activities and visits to contractor facilities. 1.6.15. Organizational Conflict of Interest: See Attachment 1A. 1.6.16. Phase-In/Phase-Out Period: To minimize any decreases in productivity and to prevent possible negative impacts on additional services, the contractor shall have personnel on board, during the thirty (30) day phase-in period. During the phase-in period, the contractor shall become familiar with performance requirements in order to commence full performance of services on the contract start date. Additionally, there will be a thirty (30) day phase-out period where the contractor shall provide training and exercise its best efforts and cooperation to effect an orderly and efficient transition to a successor contractor. 2. GOVERNMENT FURNISHED ITEMS AND SERVICES: 2.1. Services: The Government will provide basic services to telephones, desks, utilities, information technology, and general office supplies while contractor personnel are working in Government facilities. 2.2. Facilities: Basic facilities such as workspace and its associated operating requirements (i.e., computers, telephones, desks, utilities, information technology, and general office supplies) will be provided to contractor personnel while working in Government facilities. 2.3. Equipment: The Government will provide basic services to computers, phones, desks, utilities, information technology, and general office supplies while contractor personnel are working in Government facilities. Teleworkers will only use government furnished equipment to remotely access the DARPA/DFAS network. 3. CONTRACTOR FURNISHED ITEMS AND RESPONSIBILITIES: 3.1. General: The contractor shall furnish all supplies, equipment, facilities and services required to perform work under this contract that are not listed under Section 3 of this PWS. 3.2. Secret Facility Clearance: The contractor shall possess and maintain a SECRET facility clearance from the Defense Security Service. The contractor’s personnel, performing work in support of this contract shall have been granted no lower than an Interim SECRET security clearance from the Defense Industrial Security Clearance Office. The DD 254 will be forwarded to the contractor upon award of the contract. 3.3. Materials: N/A. 3.4. Equipment: N/A. 4. SPECIFIC TASKS: 4.1. Basic Services: The contractor shall provide services for accounting and financial operations support services and Chief Financial Officer’s Act support. 4.1.1. The contractor shall provide a monthly status report to include the following: ? Key activities and work accomplishments during the reporting period; ? Project deliverables submitted during the reporting period; ? Planned project activities for the next reporting period; and ? Any other information requested by the COR. 4.2. Accounting and Financial Operations Support Services: The performance of the tasks outlined below requires an in-depth knowledge of a Defense Agency’s internal structure, automated financial systems and expertise in programmatic and financial analysis, and installation level accounting. The contractor shall perform the following support services at all locations: 4.2.1. Perform continual finance and accounting assessments of work units within DARPA and document finding in reports. The contractor shall interface, communicate, and educate all levels of the Agency’s staff on the findings of the analysis. Reports and analysis may be required on an ad hoc basis with deadlines, format, and subject matter dictated by the COR (i.e. funding analysis and unliquidated obligation reports). 4.2.2. Evaluate both new and on-going business practices and/or requirements and identify areas of deficiency or inefficiency, and recommend process improvements to streamline procedures, strengthen internal management controls, and ensure compliance with relevant regulations and statutory guidance. 4.2.3. Guide Defense Agency Initiative (DAI) end users on technical items and system requirements when building system transactions and “trouble shooting” system issues. Assist with the development, application, and reporting of finance and accounting data required to operate within DAI. 4.2.4. DARPA Headquarters Specific Support. The contractor shall perform the following support services exclusively at the DARPA Headquarters site: 4.2.4.1. Provide support to research and monitor program execution, accounting records, and contract payment files for contracts managed within DARPA’s Contract Management Office (CMO). Ensure that all contracts with pending Unliquidated Obligation (ULO) have their obligations and expenditures recorded correctly in both the accounting and entitlement systems. 4.2.4.2. Identify any discrepant conditions and prepare a corrective action package that recommends a solution and describes how the solution should be implemented. Ensure the corrective action package is worked to completion. 4.2.5. DFAS-Columbus Specific Support. The contractor shall perform the following support services exclusively at the DFAS-Columbus site: 4.2.5.1. Provide on-site support at the DFAS Columbus, OH facility with a primary concentration on the Mechanization of Contract Administration Services (MOCAS). Perform contract analysis and document research support for the DARPA Financial Management staff, their support contractor(s), and the DFAS representatives that are performing reconciliations of Unmatched Disbursements (UMDs), Prevalidation and overage ULOs, and support to DARPA Tri-Annual Review (TAR). 4.2.5.2. Identify any discrepant conditions and prepare a corrective action package that recommends a solution and describes how the solution should be implemented. Ensure the corrective action package is worked to completion. 4.2.6. DFAS-Indianapolis Specific Support. The contractor shall perform the following support services exclusively at the DFAS-Indianapolis site: 4.2.6.1. Identify and reconcile accounting records that are in an “out of balance” condition. Conduct research on DFAS Indianapolis coordinated UMDs, and overage ULOs. 4.2.6.2. Identify any discrepant conditions and prepare a corrective action package that recommends a solution and describes how to implement the solution. Ensure the corrective action package is worked to completion. 4.2.6.3. Provide analysis and corrective actions, if required, thrice annually supporting the Comptroller’s TAR. 4.2.6.4. Ensure that all DARPA actions flow through DAI and CAPS-W accurately and within regulatory guidelines by providing direct on-site support within the DFAS Indianapolis Accounts Payable office. Provide policy and/or procedural updates, monitoring DARPA agreements, reconcile discrepant conditions (UMDs/Pre-validation errors), recommend corrective actions, and follow recommendations through to completion. 4.2.6.5. Act as liaison between the DARPA Financial Management staff, DFAS Mission Support Accountants, support contractor(s), DFAS Columbus, DFAS Indianapolis, and DFAS Cleveland. Coordinate with the geographically disbursed teams and implement a workload control procedure to minimize the potential of duplication of effort between the geographically disbursed teams. 4.2.6.6. Provide documentation and data review for an accounting system reconciliation for successful deployment of enterprise resource planning (ERP) upgrades or other financial information/accounting system solution and related audit readiness initiatives. 4.2.6.7. Provide recommendations to accommodate remediation plans as a result of audit or mock audit findings. The recommendations would require workflow documentation and narrative support to be reviewed and approved by the DARPA Comptroller. 4.3. Chief Financial Officer’s Act Support Services: The contractor shall perform the following services at the DFAS-Indianapolis and DARPA Headquarters locations: 4.3.1. Perform audit readiness activities and associated reviews of compliance with laws and regulations, the systems of internal controls and accounting standards, and review financial results and audit reports (when applicable). Create and maintain DARPA financial reporting objectives (FROs), and the tests of internal controls and key supporting documents (KSDs) needed to demonstrate audit readiness. At minimum two times annually or as otherwise directed by the COR, perform internal controls testing and provide assessments and recommendations for resolution of finance, accounting, accounting systems and auditing issues related to DARPA, and keep an open line of communication between DARPA, its Audit Committee and other responsible entities within the Office of Secretary of Defense (OSD), Comptroller Office. 4.3.2. Review the adequacy of internal controls over financial reporting, including computerized information system controls and security in accordance with OMB Circular A-123, Appendix A. Create and maintain business process flow charts and narratives which will include the assessment of associated risks, control activities, environment, information, monitoring, testing weaknesses (dependent or otherwise) as they relate to the reasonable assurance of financial reporting. Areas that should be documented include, but are not limited to: Fund Balance with Treasury, Accounts Receivable, Accounts Payable and Financial Reporting, Contract Pay and Civilian Pay. 4.3.3. Create new or review and update the existing permanent file documentation (procedures, processes, and key control points) necessary for DARPA to assert audit readiness, while also identifying significant financial improvements issues where corrective action plans need to be applied, including Complimentary User Entity Controls (CUECs). Complete packages of the permanent file documentation will be maintained and updated at the end of each Fiscal Year. Requirements for permanent file documentation are outlined in the FIAR guidance and OMB A- 123, Appendix A. 4.3.4. Perform reviews and reconciliations of Fund Balance with Treasury (FBWT) and maintain all requisite documentation (including, but not limited to, executive summary, reconciliations, DFAS-Defense Reconciliation & Reporting Tool [DRRT]). Review and assess the adequacy of the controls and procedures for recording transactions and determine the reasonableness of the total amounts reported as current-period transactions affecting FBWT. Amounts reviewed will include disbursements, collections, appropriations realized, transfers in, transfers in/out, and other adjustments (rescissions, etc.) of funding authority that affect FBWT. Reviews will be performed on a monthly basis. 4.3.4.1. FBWT reconciliation reports track current year and expired funds. Reports are due to the COR on a monthly basis. The report shall include the following: (i) Known causes of transactions that contribute to the Cash Management Report (CMR) balance; (ii) Resolutions to CMR balances; (iii)A breakdown of all current and expired funds by fiscal year; and, (iv) Any additional information requested by the COR. 4.3.5. Perform Internal Management Control (IMC) reviews; subject to agreed-upon procedures and timelines set forth with DARPA management and the COR. IMC’s are a deep dive into DARPA financial business processes to ensure appropriate internal controls are in place. The IMC review process requires the contractor to conduct interviews of DARPA Government and contract support staff, complete an analysis of standard operating procedures, key supporting documents, and any other relevant information to evaluate the control activities and efficiency surrounding the reviewed business process. The contractor’s project manager is responsible for participating in these events. If the project manager is unavailable then a substitute shall be identified and presented to the COR for approval. 4.3.5.1. Report on results of (IMC) reviews, following a prescribed format set forth by the DARPA Comptroller’s office including, but not limited to the following items: (i) Executive Summary; (ii) Objectives and Approach; (iii)Findings; and, (iv) Conclusions and Recommendations. 4.3.6. Reports and analysis may be required on an ad hoc basis with deadlines, format, and subject matter dictated by the COR (i.e. trading partner analysis and financial statement trending analysis) 5. PERFORMANCE REQUIREMENTS SUMMARY (PRS): 5.1. The contractor service requirements are summarized into performance objectives that relate directly to mission essential items. The performance threshold briefly describes the minimum acceptable levels of service required for each requirement. These thresholds are critical to mission success. Performance ObjectiveStandardPerformance ThresholdMethod of SurveillanceMonthly Status ReportDelivered all time and including all relevant information as described in 4.1.1No later than three days late and 95% accuracy100% inspectionCreate new or review and update the existing permanent file documentation (procedures, processes, and key control points) necessary for DARPA to assert audit readiness, while also identifying significant financial improvements issues where corrective action plans need to be applied, including complementary User Entity Controls (CUECsDeliver permanent file documentation on time with all critical elements required by FIAR guidance and OMB Circular A-123, Appendix addressedNo later than three days late and 100% accuracy100% InspectionPerform Monthly Fund Balance with Treasury (FBWT) reconciliationDeliver the FBWT reconciliation report on time including all critical elements outlined in 4.3.4On time and 100% accuracy100% InspectionPerform Internal Management Control (IMC) reviewsDeliver IMC reports on time with all critical elements described in 4.3.5 addressedOn time with 100% accuracy100% InspectionAd-hoc reports or analysis as requiredReports and analysis delivered on time addressing all critical elements required the COR On time with 100% accuracy100% Inspection ................
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