DCMA INSTRUCTION 2501
CONTRACT MAINTENANCE
Office of Primary
Responsibility: Contract Maintenance Capability
Effective: August 14, 2017
Releasability: Cleared for public release
New Issuance
Incorporates: DCMA-INST 101, “Termination for Convenience”
DCMA-INST 103, “Contract Modifications”
DCMA-INST 104, “Contract Debts”
DCMA-INST 111, “Plant Clearance”
DCMA-INST 112, “Canceling Funds”
DCMA-INST 115, “Patents and Royalties”
DCMA-INST 118, “Contract Receipt and Review”
DCMA-INST 124, “Contract Property Management”
DCMA-INST 132, “Novation, Change-of-Name, and Business
Combination (Restructuring) Agreements”
DCMA-INST 135, “Contract Closeout”
DCMA-INST 137, “Grants, Agreements, and Other Transactions”
DCMA-INST 138, “Order Issuance and Definition”
DCMA-INST 143, “Consent to Subcontract”
DCMA-INST 313, “International Requests for Contract
Administration Services”
DCMA-INST 316, “Delegate Surveillance”
DCMA-INST 325, “Contract Technical Review”
DCMA-INST 327, “Postaward Orientation Conference-QA”
DCMA-INST 328, “Overhaul, Maintenance, Modification, and
Repair”
DCMA-INST 402, “Workload Acceptance”
DCMA-INST 905, “Contract Claims and Disputes”
DCMA-INST 2501, August 14, 2017
Internal Control: Not Applicable
Labor Codes: Located on the Resource Page
Resource Page Link: https://360.dcma.mil/sites/policy/CM/SitePages/2501r.aspx
Approved by: David H. Lewis, VADM, USN
Director
Purpose: This issuance, in accordance with the authority in DoD Directive 5105.64, “Defense
Contract Management Agency”:
• Establishes policy, assigns responsibility, and prescribes general principles associated
with the Contract Maintenance capability.
• Focuses on fulfilling Agency responsibilities pursuant to Federal Acquisition Regulation
Subpart 42.302, Contract Administration Functions; Defense Federal Acquisition
Regulation Supplement Subpart 242.302, Contract Administration Functions; and DoD
Directive 3210.06, “Defense Grant and Agreement Regulatory System;” Chapter I,
Subchapter C of Title 32, Code of Federal Regulations, and Chapter XI of Title 2, Code
of Federal Regulations.
• Establishes the policy framework for the Contract Maintenance capability with
procedural manuals (DCMA Manuals (DCMA-MAN 2501-##)) that document Contract
Maintenance processes and provide implementation guidance.
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DCMA-INST 2501, August 14, 2017
TABLE OF CONTENTS
SECTION 1: GENERAL ISSURANCE INFORMATION.......................................................4
1.1. Applicability ......................................................................................................................4
1.2. Policy .................................................................................................................................4
SECTION 2: RESPONSIBILITIES............................................................................................5
2.1. Director, DCMA ................................................................................................................5
2.2. Contract Maintenance Capability Manager .......................................................................5
2.3. Component Heads/Capability Managers ...........................................................................5
2.4. Contract Management Office Commanders/Directors and Center Directors ....................6
SECTION 3: GENERAL PRINCIPLES ....................................................................................7
3.1. Description .........................................................................................................................7
3.2. Activities, Processes, and Products....................................................................................7
GLOSSARY..................................................................................................................................10
G.1. Definitions .......................................................................................................................10
G.2. Acronyms ........................................................................................................................13
REFERENCES .............................................................................................................................14
TABLE OF CONTENTS 3
DCMA-INST 2501, August 14, 2017
SECTION 1: GENERAL ISSUANCE INFORMATION
1.1. APPLICABILITY. This Instruction applies to all DCMA organizational elements.
1.2. POLICY. It is DCMA policy to:
a. Establish, deliver, and maintain a Contract Maintenance capability to fulfill the Agency’s
mission and comply with laws, regulations, and DoD issuances.
b. Perform Contract Maintenance in a multi-functional, integrated, synchronized, and
coordinated manner.
c. Apply these governing principles:
(1) Activities will be consistent, timely, responsible, responsive, repeatable, and
transparent.
(2) Administration will maintain the integrity of contracts and nonprocurement
instruments from receipt to closeout, maintain a Financial Improvement and Audit Readiness
(FIAR) compliant audit trail, and archive the official contract file in accordance with DoD
Instruction 5015.02, “Records Management Program.”
d. Execute this Instruction in a safe, efficient, effective, and ethical manner.
SECTION 1: GENERAL ISSUANCE INFORMATION 4
DCMA-INST 2501, August 14, 2017
SECTION 2: RESPONSIBILITIES
2.1. DIRECTOR, DCMA. The DCMA Director will:
a. Provide strategic oversight of the Contract Maintenance capability.
b. Appoint a Capability Manager(s) for Contract Maintenance and charter a standing cross-
functional capability board.
2.2. CONTRACT MAINTENANCE CAPABILITY MANAGER. The Contract
Maintenance Capability Manager will:
a. Serve as chairperson of the chartered Contract Maintenance Capability Board.
b. Serve as the Agency proponent for the Contract Maintenance capability and conduit to the
DCMA Executive Council, and fulfill responsibilities as delegated.
c. Ensure the development, revision, coordination, and maintainance of Contract
Maintenance capability doctrines (instruction and manuals) necessary to document the processes
and procedures to allow for consistent, standard, and repeatable work across the enterprise.
Doctrines will be in accordance with DCMA-INST 501, “Policy Issuances Program,” and
DCMA-MAN 501-01, “Policy Issuances Procedures.”
d. Ensure identification, development, revision, or modification of measures and metrics to
monitor Contract Maintenance compliance and performance.
e. Ensure development of training and tools required to execute the Contract Maintenance
capability processes.
f. Ensure continuous improvement of the Contract Maintenance capability.
g. Ensure support and coordination across all capabilities within the DCMA Business
Capabilities Framework.
h. Assign Action Officers to serve as the subject matter expert and primary focal point for
Contract Maintenance issuances and associated resource pages.
2.3. COMPONENT HEADS/CAPABILITY MANAGERS. The Component
Heads/Capability Managers will:
a. Ensure implementation of the applicable Contract Maintenance capability processes as
published in DCMA-MAN 2501 series of manuals.
SECTION 2: RESPONSIBILITIES 5
DCMA-INST 2501, August 14, 2017
b. Evaluate Agency organizational compliance and performance in accordance with
measures and metrics developed pursuant to paragraph 2.2.d. and related to the Contract
Maintenance capability.
c. Identify and implement Contract Maintenance capability continuous improvements and
initiatives.
2.4. CONTRACT MANAGEMENT OFFICE COMMANDERS/DIRECTORS AND
CENTER DIRECTORS. The Commanders/Directors and Center Directors will:
a. Execute and oversee their organizations’ day-to-day Contract Maintenance capability
processes as published in the DCMA-MAN 2501 series of manuals.
b. Implement a detection-to-prevention approach to improve the Contract Maintenance
capability.
c. Evaluate their organizations’ Contract Maintenance capability compliance and
performance.
d. Identify and implement Contract Maintenance capability continuous improvements and
initiatives.
SECTION 2: RESPONSIBILITIES 6
DCMA-INST 2501, August 14, 2017
SECTION 3: GENERAL PRINCIPLES
3.1. DESCRIPTION. The Contract Maintenance capability ensures collaborative, repeatable,
and transparent processes are employed from the time a contract is received through contract
closeout. Beginning at Contract Receipt and Review (CRR), Contract Maintenance comprises
the day-to-day efforts of DCMA contract management team members to perform contract
administration services and maintain the contract databases (e.g., Mechanization of Contract
Administration Services (MOCAS), or the contract data collection reporting capability tool
required for DCMA Special Programs contracts). Contract Maintenance ends when the contract
closes and is archived.
a. Contract Maintenance includes routine contract administration activities such as ensuring
contract accuracy upon receipt, validating requirements, processing modifications, executing
novations, clearing patents, and when necessary, settling contractor and government claims and
disputes. In addition, it involves resolving contract deficiencies, clearing recycle lists, balancing
line items, reconciling deliveries, administering terminations, administering contract property,
dispositioning plant clearance cases, resolving claims and disputes, and reconciling contract
debts towards successful contract closeout. Efficient and effective contract maintenance depends
on continuous contract accuracy, data integrity, and contract execution.
b. The value DCMA expects to deliver through this capability includes:
(1) Accurate and auditable contract files throughout the life of the contract.
(2) Efficient contract administration and data integrity.
(3) Timely product delivery.
(4) Timely return of unliquidated obligations.
(5) Timely contract closeout.
3.2. ACTIVITIES, PROCESSES AND PRODUCTS. DCMA performs significant activities
and processes for Contract Maintenance. Upon receipt of a supplier (internal or external) input
product, DCMA professionals perform these activities and processes, and consider them to be
completed with the issuance of a fully-executed output product to the benefitting customer. The
table that identifies the overarching Supplier, Input, Activities/Processes, Output, and Customer
(SIPOC) construct and capabilities linkages is located on the Contract Maintenance resource
page.
a. Activities and Processes. The major activities and processes associated with the Contract
Maintenance capability include:
(1) Identifying and accepting requirements of core and approved non-core mission work
requests.
SECTION 3: GENERAL PRINCPLES 7
DCMA-INST 2501, August 14, 2017
(2) Performing CRR and administering contracts, nonprocurement instruments, and
modifications.
(3) Ensuring contract accuracy and data integrity.
(4) Conducting post award orientation conferences.
(5) Issuing contract modifications, supplemental agreements, and administrative
changes.
(6) Issuing orders (provisioning, change, and over and above).
(7) Issuing amended shipping instructions.
(8) Processing and distributing Novation and Change-of-Name Agreements.
(9) Canceling unilateral purchase orders.
(10) Dispositioning government contract property.
(11) Adjudicating property loss.
(12) Administering terminations for convenience.
(13) Processing Consent to Subcontract requests.
(14) Administering patents and royalties.
(15) Managing contract funds and unliquidated obligations.
(16) Settling claims and disputes.
(17) Performing contract closeout.
b. Products. Major products associated with the Contract Maintenance capability include:
(1) Delegation acceptance.
(2) Workload Acceptance Determination memorandum.
(3) Validated requirements from contract receipt and review.
(4) DCMA Form 1797, Request for MOCAS Action.
(5) DD Form 1155, Order for Supplies or Services.
(6) DD Form 1716, Contract Data Package Recommendation/Deficienty Report.
(7) DD Form 1484, Post-Award Conference Record.
SECTION 3: GENERAL PRINCPLES 8
DCMA-INST 2501, August 14, 2017
(8) SF 30, Amendment of Solicitation/Modification of Contract.
(9) Executed Novation or Change of Name Agreement.
(10) Closed plant clearance case and disposition instructions.
(11) Termination status report and termination settlement.
(12) Surveillance plan and closeout notification for grants, agreements, and other
transactions.
(13) Payment withhold determination.
(14) Processed patent or royalty report.
(15) Alternate disputes resolution, final decisions, and unilateral rate determinations.
(16) Final Pay Notice of Last Action (FPNLA).
(17) DD Form 1597, Contract Closeout Checklist.
SECTION 3: GENERAL PRINCPLES 9
DCMA-INST 2501, August 14, 2017
GLOSSARY
G.1. DEFINITIONS.
Administering Contract Management Office (CMO). The contract administration office
identified in contracts, modifications, and nonprocurement.
Business Capabilities Framework. A structure that distinguishes a policy’s what and why from
the process’ how to, and integrates automation in an agile business environment. The “what and
why” are delineated in DCMA Instructions, and the “how to” is delineated in DCMA Manuals.
Capability. Pursuant to DoD Directive 7045.20, Capability Portfolio Management, capability is
the ability to achieve a desired effect under specified standards and conditions through a
combination of means and ways across doctrine, organization, training, materiel,
leadership and education, personnel, and facilities to perform a set of tasks to
execute a specified course of action.
Capability Manager. The individual or individuals identified by the Director, DCMA, as the
proponent with advocacy for all Agency efforts under a given Capability. The Capability
Manager is responsible for the doctrine (instructions and manuals), tools, and training associated with
the process and activities that fall under the purview of the Capability.
Claim. A legal assertion or demand taken by a person wanting compensation, payment, or
reimbursement for a loss under a contract, or an injury due to negligence.
Component Head. The leader of a DCMA organization who reports directly to the Director,
DCMA.
Contract. A mutually binding legal relationship obligating the seller to furnish the supplies or
services (including construction) and the buyer to pay for them. It includes all types of
commitments that obligate the government to an expenditure of appropriated funds and that,
except as otherwise authorized, are in writing. In addition to bilateral instruments, contracts
include (but are not limited to) awards and notices of awards; job orders or task letters issued
under basic ordering agreements; letter contracts; orders, such as purchase orders, under which
the contract becomes effective by written acceptance or performance; and bilateral contract
modifications. Contracts do not include grants and cooperative agreements.
Contract Accuracy. Contract is free from error as validated by contract receipt and review and,
if applicable, completed Contract Data Package Recommendation/Deficiency Report(s). For
example, errors can be administrative, omission of clauses, or incorrect DCMA office.
Contract Administration Service. FAR 42.302 pre-award and post-award actions accomplished
for the benefit of the government, which are necessary to the performance of a contract or in
support of the buying offices, system/project managers, and other organizations. It includes
quality assurance, engineering support, production surveillance, pre-award surveys, mobilization
planning, contract administration, property administration, industrial security, and safety.
GLOSSARY - DEFINITIONS 10
DCMA-INST 2501, August 14, 2017
Contract Management Office (CMO). An organizational unit within DCMA that is assigned
pre-award and post-award functions related to the administration of contracts. The office is
responsible for managing and administering assigned contracts from contract receipt to contract
closeout.
Contract Management Team. A team of functional specialists assigned to contracts and
Commercial and Government Entity codes under their geographic purview. They are acquisition
professionals whose expertise, advice, and counsel contribute to the accomplishment of contract
administration services.
Contracting Activity. An element of an agency designated by the agency head and delegated
broad authority regarding acquisition functions. Contracting activity for DoD also means
elements designated by the director of a defense agency that has been delegated contracting
authority through its agency charter (DFARS 202.101). Included are a DoD or military
procurement organization with authority and responsibility for awarding a contract or
nonprocurement instrument for a product or service, and non-DoD organizations such as
National Aeronautics and Space Administration, General Services Administration, or foreign
country.
Data Integrity. Data integrity refers to maintaining and assuring the accuracy, consistency, and
completeness of data over its entire life-cycle authenticated through the ongoing use of error
checking and validation routines, and is a critical aspect to the design, implementation, and usage
of any system that stores, processes, or retrieves data.
Delegating CMO. CMO responsible for monitoring the prime contractor's activities and
exercising oversight and surveillance of the primes' subcontractor(s) through letters of
delegations to a supporting CMO cognizant over that subcontractor(s).
Detection to Prevention. A cultural mindset that transitions DCMA acquisition oversight
activities from detection to prevention and can be applied to any DCMA process. Detection to
Prevention is a proactive surveillance and management strategy that focuses on process
capability; risk assessment and mitigation; verification of contractors’ systems, processes, and
outputs; and data-driven actionable information.
Dispute. A conflict or controversy; conflict of claims or rights; an assertion of a right, claim, or
demand on one side, met by contrary claims or allegations on the other.
External Customer. A non-DCMA organization that receives products or service requests
resulting from DCMA action (e.g., buying authorities, contractors, Defense Finance and
Accounting Service).
External Supplier. A non-DCMA organization that generates products or service requests
requiring DCMA action (e.g., buying authorities, contractors, Defense Contract Audit Agency).
Financial Improvement and Audit Readiness. Department of Defense’s effort to attain and
sustain an unqualified “clean” audit opinion for financial transactions and financial systems.
FIAR is demonstrated through a financial statement audit performed by independent auditors,
resulting in an unmodified audit opinion on Agencies’ financial statements.
GLOSSARY - DEFINITIONS 11
DCMA-INST 2501, August 14, 2017
Internal Customer. A DCMA organization or capability that receives products or service
requirements from another DCMA organization or capability
Internal Supplier. A DCMA organization or capability that generates products or service
requirements to another DCMA organization or capability.
Nonprocurement Instruments. A legal instrument other than a procurement contract that falls
into three basic types: grants, cooperative agreements, and other transactions. Grants and
cooperative agreements are awarded when a Federal agency is providing assistance, such as
financial assistance or services, in lieu of money. An other transaction may be used by DoD
when it has been determined that it is in the government’s best interest to enter into an agreement
that is not a contract, grant, or cooperative agreement.
Transferring CMO. CMO that transfers administration of a contract to another CMO.
Validated Requirements. Requirements of a contract, modification, or nonprocurement
instrument that have been reviewed and validated to be accurate, compliant, and complete.
GLOSSARY - DEFINITIONS 12
DCMA-INST 2501, August 14, 2017
GLOSSARY
G.2. ACRONYMS.
CMO Contract Management Office
CRR Contract Receipt and Review
DCMA-INST DCMA Instruction
DCMA-MAN DCMA Manual
DD Department of Defense
FAR Federal Acquisition Regulation
FIAR Financial Improvement and Audit Readiness
MOCAS Mechanization of Contract Administration Services
SF Standard Form
GLOSSARY – ACRONYMS 13
DCMA-INST 2501, August 14, 2017
REFERENCES
DCMA-INST 501, “Policy Issuances Program,” April 13, 2017
DCMA-INST 501-01, “Policy Issuances Procedures,” April 13, 2017
DFARS Subpart 202.101, “Definitions,” December 22, 2016
DFARS Subpart 242.302, “Contract administration functions,” December 22, 2016
DoD Directive 3210.06, “Defense Grant and Agreement Regulatory System,” February 6, 2014
DoD Directive 5105.64, “Defense Contract Management Agency (DCMA),” January 10, 2013
DoD Directive 7045.20, “Capability Portfolio Management,” September 25, 2008
DoD Instruction 5015.02, “DoD Records Management Program,” February 24, 2015
FAR Subpart 2.101, “Definitions,” January 19, 2017
FAR Subpart 42.302, “Contract Administration Functions,” January 19, 2017
REFERENCES 14
