Overview
This section prescribes how the Contract Administration Office (CAO) determines the appropriate level of production oversight for a contract, based on the criticality of the requirement and the contractor's specific risk profile. It establishes the criteria for surveillance intensity while providing safeguards against unauthorized contract modifications during the oversight process.
Key Rules
- Determination of Intensity: The CAO determines the extent of surveillance based on the "criticality designator" assigned by the Contracting Officer and a variety of risk factors, including the contractor’s financial capability, past performance, and experience.
- Threshold Exception: Production surveillance is typically not required for contracts at or below the Simplified Acquisition Threshold (SAT).
- System Integration: CAOs are required to maximize the use of the contractor’s own reliable production control and data management systems to avoid redundancy.
- Strict Non-Interference: Government personnel performing surveillance are prohibited from taking any actions that contradict contract requirements or could be interpreted as a waiver or unauthorized contract modification.
Practical Implications
- Risk-Based Oversight: Contractors with proven performance histories and robust internal tracking systems may experience less intrusive government oversight compared to new or high-risk contractors.
- Prevention of Constructive Changes: To avoid legal disputes and claims, CAO personnel must ensure that their surveillance activities do not inadvertently direct the contractor to perform work outside the original scope of the contract.