Surveillance requirements
Production surveillance should be risk-based, focused on critical contracts, and must not result in unintended contract changes or waivers.
Overview
FAR 42.1104 outlines the requirements for production surveillance by contract administration offices. The extent of surveillance is determined by the criticality of the supplies or services, as assigned by the contracting officer, and several other factors such as reporting requirements, performance schedule, contractor’s production plan, past performance, experience, financial capability, and any additional instructions from the contracting office. Generally, contracts at or below the simplified acquisition threshold do not require production surveillance. When planning and conducting surveillance, contract administration offices should utilize reliable contractor systems and avoid actions that could conflict with contract requirements or result in unintended contract modifications.
Key Rules
- Determining Surveillance Extent
- Surveillance is based on the criticality of the contract and several performance and capability factors.
- Threshold for Surveillance
- Contracts at or below the simplified acquisition threshold typically do not require surveillance.
- Use of Contractor Systems
- Contract administration offices should leverage reliable contractor production control or data management systems.
- Avoiding Contractual Issues
- Surveillance personnel must not take actions that conflict with contract requirements or could be interpreted as waivers or modifications.
Responsibilities
- Contracting Officers: Assign criticality and provide supplementary instructions as needed.
- Contractors: Maintain reliable production control/data management systems and comply with reporting and performance requirements.
- Agencies: Plan and conduct surveillance appropriately, using contractor systems and avoiding actions that could alter contract terms.
Practical Implications
- This section ensures that surveillance is risk-based and efficient, focusing resources on critical contracts and leveraging contractor systems to reduce redundancy. It helps prevent unnecessary oversight on low-value contracts and minimizes the risk of unintentional contract changes during surveillance. Common pitfalls include over-surveillance of low-risk contracts and inadvertently modifying contract terms through surveillance actions.