Quantcast Other Adjustments

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(d) Random Sampling Without Extrapolated Deductions. Random sampling
without extrapolated deductions involves the use of statistical techniques
to assess the contractor's quality control but not to determine deductions
to the contract price.
When random sampling without extrapolated deductions (RSWED) is used,
deductions are made only for observed defects not completed (or reworked) in
a satisfactory and timely manner.  Observed defects consist of those found
in the sample and validated customer complaints.  Liquidated damages are
applied to all observed defects. Certain items such as timeliness of
completion are not subject to rework. The inspection results used in the
example are shown below, and Figure 6-5 lists the steps in the calculation.
CONTRACT REQUIREMENT: 002. Routine Service calls
Price from Schedule of Deductions: $12,000/mnth.
WORK
% OF CONTRACT
PRICE OF WORK
REQUIREMENT  REQUIREMENT  MADR
REQUIREMENT
$3,600 (30% of $12,000)
A.
Response time
30%
3%
B.
Classification
$ 600 (5% of $12,000)
5%
3%
$ 600 (5% of $12,000)
C.
Cost accounting
5%
3%
$7,200 (60% of $12,000)
D.
Quality work
60%
3%
INSPECTION RESULTS.
Population:  600
Number of services sampled: 60 (minimum level)
DEFECTS
VALIDATED  TOTAL
DEFECTS  DEFECTS
WORK
IN
CUSTOMER
OBSERVED  REWORKED REWORKED
REQUIREMENT
SAMPLE
COMPLAINTS DEFECTS  BY CONTR. BY GOVT.
A.
Response Time
6
2
8
N/A
N/A
B.
Classification
5
2
7
7
0
C.
Cost accounting
4
3
7
7
0
D.
Quality work
2
2
4
0
4
Actual cost of rework (Quality Work) by Government = $138.00
6-681 Other Adjustments. The following example show how the other
adjustments were calculated in the example in Figure 6-4.
Adjustment for Rework from Prior Billing Period. Three (3) additional
customer complaints for the previous month (RSED example above) were
received and reworked after the payment was processed. The calculation for
these other adjustments is shown below.  (This calculation should rarely be
necessary and is included here only for the sake of completeness.)
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