DFARS 252.242-7005 Contractor Business System - Withholding
After Final Written Determination of System Deficiencies
- The Contracting Officer will identify contracts containing DFAR 252.242-7005 from which payment will be withheld.
Withhold Amounts
- DOD may withhold 5% for each disapproved system, up to 10%
- If the Contracting Officer determines that the contractors corrective action plan is acceptable, the amount can be reduced to 2%.
- If the corrective action plan is not followed, withholding will increase to the original amount.
- If the corrective action plan is not evaluated within 90 days, the Contracting Officer is required to reduce remaining withholds by 50%
Withhold Release
Amounts withheld will be released once all deficiencies have been corrected and systems have been deemed approved.