1 wawf integration pv/dvd contract receipt acceptance supply prc meeting october 16, 2008

1

WAWF INTEGRATION

PV/DVD CONTRACT RECEIPT ACCEPTANCE

SUPPLY PRC MEETING October 16, 2008

2

BACKGROUND

• DFARS 252.232-7003 clause mandates WAWF– Final rule, March 2008

• WSLM/MSSM Investment Review Board (IRB) – Receipt & Acceptance Condition required for Systems Certification

• Any system performing receipt and acceptance must use WAWF or provide BTA a WAWF Integration Plan

• DPAP Memorandum– Investigate current processes for compliance with FAR 32.905 and

Prompt Payment Act record keeping requirements

• Establish acceptance procedures for DLA originated Prime Vendor/Direct Vendor Delivery contracts where MILSVCs are direct recipients for items delivered

• Identify any issues and associated corrective actions• Develop WAWF transition/deployment plan

3

Policy Issue• Prompt Pay Act mandates government receipt/acceptance as

prerequisite for DoD paying vendors for goods and/or services

• Wide Area Work Flow (WAWF) identified as authoritative source for invoice, acceptance and/or documentation to make payment . . . . DoD wide impact for customer requirements are satisfied via direct vendor shipments requiring destination acceptance.

• Prime Vendor/Direct Vendor Deliveries:

– Financial risk to Supply Source: Lack of timely destination acceptance results in late payment and interest penalties

– Issue: WAWF capability not fully integrated within Service applications pending full deployment under ERP/modernization – variations in implementation by Services, manual workload

4

Interface Functionality

Currently:– MILSVCs systemic interface generates a Material Receipt

Acknowledgement (MRA, EDI 527R) transaction for a Direct Vendor receipt

WAWF Integration Concerns:– MILSVCs warehousing systems do not have an automated interface

with WAWF for receipt acceptance

– DFARS clause 252.232-7003 mandates vendors submit request for payment (invoice and receiving report ) via WAWF

– If a ship-to DODAAC does not have a registered acceptor the vendor cannot submit their request for payment via WAWF

– Some supply chains utilize vendor direct shipments which are initiated/received outside standard ordering and warehousing systems making WAWF integration more difficult

5

Prime Vendor vs. DVD

Total Sum of Shipments: PV vs. DVD

Total PV1,668,37887.29%

Total DVD 242,95712.71%

Total PV Total DVD

Note: Data source: EBS Business Warehouse, count of Customer requisitions. FMS and ‘Vendor to Vendor’ data excluded from total vendor ship data

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Total Prime VendorTotal PV Sum of Shipments by Service

A483,034

29%

F589,317

35%

M20,294

1%

N367,117

22%

O194,292

12%

Z14,324

1%

A

F

M

N

O

Z

Note: Data source EBS Business Warehouse, count of customer requisitions. FMS and ‘vendor to vendor’ data excluded from total vendor ship data‘O’ = Other Federal Activities ‘Z’ = Coast Guard

7

Total Direct Vendor Delivery

Total DVD Sum of Shipments by Service

A141,431

57%F35,88415%

M 12,306

5%

N49,87521%

O1,7541%

Z1,7071%

A

F

M

N

O

Z

Note: Data Source: EBS Business Warehouse, count of customer requisitions. FMS and ‘vendor to vendor’ data excluded from total vendor ship data‘O’ = Other Federal activities ‘Z’ = Coast Guard

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Receipt Acceptance Financial Management Regulation:

010109. Acceptance and Receipt. Acceptance is acknowledgment that supplies or services conform to applicable quality and quantity requirements, and may take place before, at time of, or after delivery. The organization(s) responsible for acceptance shall be specified in the contract. Acceptance ordinarily is evidenced by execution of an acceptance certification on an inspection or receiving report form or commercial shipping document or packing list.

Entitlement to invoice payments shall include, as applicable, additional determinations such as proof of receipt and acceptance, receipt of a proper invoice, and verification of all computations.

Source: DOD FMR Vol 10, Chap 1, Mar 2002

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Receipt Processing Policy

Materiel Management Regulation

“All receipts of material at DoD distribution depots or at other wholesale or retail storage sites, (hereafter referred to collectively as “storage activities”) shall be recorded in DoD total item property records and shall be visible to all requiring activities.

All receipt of materiel at final destination shall be acknowledged by immediate issuance of an electronic material receipt acknowledgment.

Use of other than electronic data interchange to communicate receipt transactions and related documents is authorized only in exceptional circumstances.”

Source: DoD 4140.1R – Paragraph C3.8.1.1:

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PV/DVD Shipments

• Question asked at OSD SCI Contract Acceptance Procedures meeting: “how are the Services/DLA capturing receiving report/acceptance information?”

• 4 receipt acceptance processes• MILSVC Central Receiving• MILSVC End Customer• Contractor Receipt• DLA Central Receiving

Note: Contract acceptance compliance is achieved when the name, title, phone and address information of the receipt acceptor is provided as described in the FAR 32.905 and Prompt Payment Act

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Vendor Direct Shipments

• Requirement: Government personnel must be accountable for acceptance

• Today, payment on PV/DVD contracts is based upon evidence of receipt, not acceptance; therefore requirements of 5 CFR Part 1315 not met

• Internal controls need strengthened to ensure contract requirements are met before payment

12

BACK-UP DATA

13

Total Vendor Direct

AV118,944

CE90,538 CT

452

LN50,083

MD1,404,387

MR2,997

SB483

UN494

0

500,000

1,000,000

1,500,000

Sum of Shipments

AV CE CT LN MD MR SB UN

Supply Chain

Total PV Sum of Shipments by Supply Chain


Supply Chain Total Sum of PV Shipments

Aviation (AV) 118,944

Construction & Equip (CE) 90,538

Clothing & Textiles (CT) 452

Land (LN) 50,083

Medical (MD) 1,404,387

Maritime (MR) 2,997

Subsistence (SB) 483

Unknown (UN) 494

AV56,459

CE40,450

CT2,511

LN109,707

MD11,213

MR20,212

SB2,402

UN3

020,00040,00060,00080,000

100,000120,000

Sum of Shipments


Supply Chain

Total DVD Sum of Shipments by Supply Chain


Supply Chain Total Sum of DVD Shipments

Aviation (AV) 56,459

Construction & Equip (CE) 40,450

Clothing & Textiles (CT) 2,511

Land (LN) 109,707

Medical (MD) 11,213

Maritime (MR) 20,212

Subsistence (SB) 2,402

Unknown (UN) 3Note: Data source EBS Business Warehouse, count of customers requisitions. FMS & ‘vendor to vendor’ data excluded from totalvendor shipment data. ‘O’ = Other Fed activities, ‘Z’ = Coast Guard

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Medical Prime Vendor

PV (medical supply chain) Sum of Shipments by Service

A410,60029.24%

F493,55335.14%

M5,4570.39%

N287,19720.45%

O193,39413.77%

Z14,1861.01%

A

F

M

N

O

Z

Note: Data source: EBS Business Warehouse, count of customer requisitions. FMS & ‘vendor to vendor’ data excluded from total vendor shipment data‘O’ = Other Federal activities ‘Z’ = Coast Guard

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ARMY

AV 1,335

C&E 22,113

C&T 40

LN 50,069

MD 410,600

SB 823,685

UN 155

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

Sum of Shipments

AV C&E C&T LN MD MR SB UN

Supply Chain

Army PV Sum of Shipments by Supply Chain

AV C&E C&T LN MD MR SB UNARMY

PV DVD

AV 1,335 9,219

C&E 22,113 27,468

C&T 40 1,660

LN 50,069 100,163

MD 410,600 1,513

MR 31

SB 823,685 22,143

UN 155 1,273

AV 9,219

C&E 27,468

C&T 1,660

LN 100,163

MD 1,513

MR 31

SB 22,143 UN

1,273

-

20,000

40,000

60,000

80,000

100,000

120,000

Sum of Shipments


Supply Chain

Army DVD Sum of Shipments by Supply Chain


AV Aviation

CE Construction & Equipment

CT Clothing & Textile

LN Land

MD Medical

MR Maritime

SB Subsistence

UN Unknown

Note: Data source: EBS Business Warehouse, count of customerrequisitions. FMS & ‘vendor to vendor’ data excluded from total vendor shipment data

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AIR FORCE

AV 83,980 C&E

11,449

MD 493,553

SB 517,173

UN 209

-100,000200,000300,000400,000500,000600,000

Sum of Shipments


Supply Chain

Air Force PV Sum of Shipments by Supply Chain


AV 29,337

C&E 4,133

C&T 249

LN 1

MD 2,009

SB 50,041

UN 8

-10,000

20,00030,000

40,000

50,00060,000

Sum of Shipments


Supply Chain

Air Force DVD Sum of Shipments by Supply Chain


Air Force

PV DVD

AV 83,980 29,337

C&E 11,449 4,133

C&T 249

LN 1

MD 493,553 2,009

MR

SB 517,173 50,041

UN 209 8

AV Aviation



LN Land

MD Medical

MR Maritime

SB Subsistence

UN Unknown

Note: Data source: EBS Business Warehouse, count of customerRequisitions. FMS & ‘vendor to vendor’ data excluded from total vendor shipment data

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MARINE CORPS

C&E 14,246 C&T

406

LN 12

MD 5,457

MR 1

SB 174,900

UN 5

-

50,000

100,000

150,000

200,000

Sum of Shipments


Supply Chain

Marine Corps PV Sum of Shipments by Supply Chain


AV 174

C&E 1,223

C&T 417

LN 9,154

MD 1,124

MR 28

SB 13,299

UN 1

-

5,000

10,000

15,000

Sum of Shipments


Supply Chain

Marine Corps DVD Sum of Shipments by Supply Chain


Marine Corps

PV DVD

AV 174

C&E 14,246 1,223

C&T 406 417

LN 12 9,154

MD 5,457 1,124

MR 1 28

SB 174,900 13,299

UN 5 1

AV Aviation



LN Land

MD Medical

MR Maritime

SB Subsistence

UN Unknown

Note: Data source: EBS Business Warehouse, count of customer requisitions.

FMS and ‘vendor to vendor’ excluded from total vendor shipment data

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NAVY

AV34,963

C&E42,052 C&T

6LN1

MD287,197

MR2,652

SB319,374

UN195

-50,000

100,000

150,000

200,000

250,000

300,000350,000

Sum of Shipments


Supply Chain

Navy PV Sum of Shipments by Supply Chain


AV17,688 C&E

6,973 C&T175

LN50

MD6,073

MR18,362

SB46,742

UN22

-

10,000

20,000

30,000

40,000

50,000

Sum of Shipments


Supply Chain

Navy DVD Sum of Shipments by Supply Chain


NAVY

PV DVD

AV 34,963 17,688

C&E 42,052 6,973

C&T 6 175

LN 1 50

MD 287,197 6,073

MR 2,652 18,362

SB 319,374 46,742

UN 195 22

AV Aviation



LN Land

MD Medical

MR Maritime

SB Subsistence

UN Unknown

Note: Data source: EBS Business Warehouse, count of customer requisitions. FMS and ‘vendor to vendor’ data excluded from total vendor shipment data

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‘O’ Other Defense Activities

C&E541

LN2

MD193,394

MR344

SB112,582

-

50,000

100,000

150,000

200,000

Sum of Shipments


Supply Chain

"O" PV Sum of Shipments by Supply Chain


‘O’ Other Defense Activities

PV DVD

AV 41

C&E

541 256

C&T 8

LN

2 339

MD

193,394 412

MR

344 573

SB

112,582 266,834

UN 371

AV41

C&E256

C&T8

LN339

MD412

MR573

SB266,834

UN371

-

100,000

200,000

300,000

Sum of Shipments


Supply Chain

"O" DVD Sum of Shipments by Supply Chain


AV Aviation



LN Land

MD Medical

MR Maritime

SB Subsistence

UN Unknown

Note: Data source: EBS Business Warehouse, count of customer requisitions. FMS and ‘vendor to vendor’ excluded from total vendor shipment data

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‘Z’ Coast Guard

C&E137

MD14,186

SB9,664

UN2

-

5,000

10,000

15,000

Sum of Shipments


Supply Chain

"Z" PV Sum of Shipments by Supply Chain


C&E397 C&T

2

MD82

MR1,218

SB1,593

-

1,000

2,000Sum of

Shipments

AV C&EC&T LN MD MR SB UN

Supply Chain

"Z" DVD Sum of Shipments by Supply Chain


PV DVD

AV

C&E

137 397

C&T 2

LN

MD

14,186 82

MR 1,218

SB

9,664 1,593

UN

2 AV Aviation



LN Land

MD Medical

MR Maritime

SB Subsistence

UN Unknown

Note: Data source: EBS Business Warehouse, count of customer requisitions. FMS and ‘vendor to vendor’ data excluded from total vendor shipment data

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Definitions – Acceptance WAWF Strategic Plan

Acceptance Evidence• Documentation of the act of assuming ownership of legal title and accountability of goods

tendered and services rendered, excluding Real Property Placed in Service Notification. This serves as proof that the deliverables received or services rendered have been provided fulfilling specified terms and conditions against the previously agreed upon agreement, contract, and/or intra-governmental order between the supplier and the buyer. It also must include information necessary for Asset Valuation (e.g., capitalize vs. expense determinations).

Final Acceptance• The final acceptance process includes the act of an authorized representative assuming

ownership and accountability of existing identified goods tendered or approved specific services rendered. This includes final review and signing of documentation that triggers final payment, asset accountability, inventory record updates, etc.

• For intra-governmental orders, acceptance is deemed to occur constructively, unless otherwise

denoted in the order, on the 7th calendar day after the government buyer receives delivery of supplies or performance of services in accordance with the terms and conditions of the order, unless there is a disagreement over quantity, quality, or compliance with other terms and conditions of the order. The trading partners may specify a longer period for constructive acceptance in the solicitation and resulting order, if required, but must document in the file the justification for extending the constructive acceptance period beyond 7 days. Constructive acceptance for intra-governmental orders will trigger the payment process.

• The definition of constructive acceptance should not be interpreted to conflict with

established/existing FAR or FMR definitions or other regulatory guidance. This definition is strictly to apply to intra-governmental reimbursable transactions only, and occurs after initial acceptance by the government

Source: WAWF Strategic Plan 2007

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WAWF / Customer Direct / EBS

VendorVendor EDI

GEX

GEX

Vendor FTPVendor Web

Vendor EDI

EBS

WAWF

CustomerDirect

UIDRegistry

ASN 856

Invoice 810

ASN 856/Email Notice to

Receiving Activity

Acceptance Report

861

DAASC

GEX

Acceptance 861

Invoice 810

UID Info

Material Receipt Acknowledgement

527R

AR 861

GEX

DAASC

DAAS(GEX)

ASN 856

Pending DoD-wide implementation of WAWF

RR for inter-Service/Agency

shipments

1 wawf integration pv/dvd contract receipt acceptance supply prc meeting october 16, 2008

Documents

vendor data

direct vendor shipments

vendor direct shipments

difficultprime vendor

wawf capability

payment invoice

acceptance andor documentation

late payment