Revised Policies and Procedures on the Acceptance of BIR Tax Computerization Project (TCP) Deliverables and the Designation of Signatories of TCP Documents and Invoices

September 27, 1996 REVENUE MEMORANDUM ORDER NO. 29-96 TO : All Project Steering Committee (PSC) Chairperson, BIR Project Management Office (BIR-PMO), and Other Internal Revenue Officers and Employees Concerned SUBJECT : Revised Policies and Procedures on the Acceptance of BIR Tax Computerization Project (TCP) Deliverables and the Designation of Signatories of TCP Documents and Invoices In line with the on-going BIR-Philippine Tax Computerization Project (PTCP), popularly known as Systems for Philippine Internal Revenue Information Technology (SPIRIT), this Revenue Memorandum Order is issued to achieve the following objectives: I. Objective/Scope: (a) to revise existing procedures in declaring the acceptance status of delivered products within the BIR PTCP so as to ensure that products are accepted uniformly across the BIR and that AC-PS, Inc. is aware of the reasons for acceptance and rejection: (b) to designate revenue officials and personnel to accept and sign the disbursement vouchers for the deliverables of AC-PS, Inc. for the PTCP; (c) to provide policy guidelines and procedures in processing all pending and future invoices of AC-PS, Inc. II. Guidelines and Procedures: A. Policy/Guidelines for Acceptance of ITS/IAS: 1. The Bureau can take only three positions with regard to an AC-PS, Inc. deliverable: a. There are no outstanding major issues. Conditional acceptance may be issued only if outstanding issues are minor. b. Reject There are outstanding major issues. c. Default acceptance. Invoked whenever neither acceptance nor rejection is issued within agreed time frames. (N.B. This should not be allowed to happen.) 2. Procedures for acceptance, including the classification of issues into major/minor are prescribed in ATTACHMENT 1 "Product Acceptance Certificate Procedure". These procedures implement the policy of regular reexamination of outstanding issues at each subsequent acceptance point. Minor issues will be reclassified as major according to the acceptance criteria at each acceptance point. 3. For Deliverable/Products that have been conditionally accepted, such acceptance notices allow for invoicing and collections per CN 144. Given the above guidelines, the Bureau should be able to process all pending invoices with conditional sign-offs. B. The following documents are also attached for the guidance of all concerned: 1. List of Designated Signatories of Vouchers for the PTCP (ATTACHMENT 2) 2. Required attachments for AC-PS invoices (ATTACHMENT 3) 3. Invoice Processing Workflow (ATTACHMENT 4) This Order takes effect immediately. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue ATTACHMENT 1 BUREAU of INTERNAL REVENUE Philippine Tax Computerization Project Product Acceptance Certification Procedure Bureau of Internal Revenue Product Acceptance Certification Procedure Philippine Tax Computerization Project Standard Procedure I. INTRODUCTION This document describe the procedure for declaring the acceptance status of delivered products within the Bureau of Internal Revenue (BIR) Philippine Tax Computerization Project (PTCP). It ensures that products are accepted in a uniform way (Appendix G) across the Bureau and that the supplier is aware of the reason for acceptance or rejection. The emphasis is on ITS/IAS but other, deliverables could be accepted using this framework. Additional related documents references by this framework are: IFB; 46, Implementation, 3. Acceptance Verification Change Notice 53, Clarification and Refinement of Payment Terms regarding ITS-IAS Customs Software Change Notice 91, Agreed Acceptance Period for Deliverables Change Notice 138, System Test Signoff Framework Change Notice 144, Product Acceptance Processes and Timeframes Change Notice 145, Default Sign-offs Change Notice 146, "Ready for Use" Sign-off Framework and Criteria 2. OBLIGATIONS OF THE DESIGNATED SIGNATORY The contract between the BIR and AC-PS Inc. for delivery of the PTCP imposes obligation on both parties in the successful implementation of the contract, AC-PS is obliged to deliver products and, turn, the BIR is obliged to release payments to AC-PS in a timely manner upon acceptance of the products. In order to carry out their part of the contract, the BIR has implemented certain procedures and methods. One of these activities is the identification of 'Designated Signatories'. A Designated Signatory is the individual identified as being best placed to judge that a deliverable conforms to the contract. The process by which this judgment is made is embodied in this procedure and uses the approach of considering the effect of not resolving conditions for particular deliverables. Notwithstanding this, the procedure still requires the application of professional judgment. There are two issues which should be considered when accepting deliverables. Should the Designated Signatory accept a deliverable which is incomplete, faulty or does not conform to standards, disciplinary procedures may be invoked by the BIR, DOF or COA. Should the Designated Signatory not accept a deliverable which is complete, free from faults and conforms to standards, the Designated Signatory and, therefore, the BIR is in breach of the contract and AC-PS within its rights to enforce payment. It is possible that disciplinary procedures may be invoked by the BIR, DOF or COA under these circumstances also. It is important to understand that these two issues are not in conflict. As long as the Designated Signatory approaches the task with professionalism, deliverables should be accepted on time and to the required level of quality. It is important for the Designated Signatory to rely on their advisers, both user and technical, in order to satisfy themselves that the deliverables may be signed off. Blocks to acceptance are outstanding conditions which are classified as Major under this procedure. Deliverables may be accepted with Minor conditions outstanding. These do not all block acceptance because the procedure ensures that all conditions become Major by the time the final acceptance point is reached. Deliverables accepted at this point will have no outstanding conditions. Also, implicit in the procedure is a timetable by which all outstanding conditions are resolved. Such a timetable must be set no later that the final acceptance point. The timeframe for implementing this procedure is outlined in the documents listed in 1. Introduction; Related Documents. Essentially, it is based on a seven (7) day cycle. i.e. once the BIR has received a deliverable for acceptance, they have 7 days to inspect it and reply to AC-PS. AC-PS has 7 days to reply and return the deliverable to the BIR.. This cycle continues until the BIR and AC-PS agree that all Major conditions have been resolved and the deliverable is accepted. Many, but not all, deliverable are associated with a payment point. Because of the potential for disciplinary actions following inappropriate or untimely release of payments, it is important for the Designated Signatories to understand the implications of accepting the deliverables which trigger payment. To assist with this, a table of the cost of the ITS deliverables is included as Appendix E to this procedure. Costs for other deliverables are available from the PMO or Internal Audit. 3. PROCESS 3.1 Determine the Acceptance Status Step Form Description Responsibility 1 Collects all outstanding conditions on the Designated product under review. This includes Signatory or conditions which have been raised on advisor the current deliverable and unresolved conditions on previous deliverables which were classified as Minor at the previous sign off. Any outstanding SIR's on the current deliverable are also considered to be conditions for this exercise. 2 APPENDIX A Prepares and fills in the following portions Designated of the Conditions List. For each Condition: Signatory or SIR Number - If an SIR has been advisor raised Short Description - If an SIR has been raised for this condition then 'Short Description of Discrepancy'. Else a short description. 3 APPENDIX A Determine the Severity level of each Designated Condition using the following process: Signatory or advisor For each Condition listed in Step 1: Determine the Condition Type by comparing the symptom of the Condition with those listed in the Condition Type and Severity Matrix (Appendix D). Enter the type in the Condition Type portion of the Conditions List. Determine the Severity (Major/ Minor) from the Condition Type and Severity Matrix (Appendix D) with regard to the Condition Type found above and the deliverable for the Product. Enter the Severity in the Severity portion of the Conditions List. 4 APPENDIX A If any one Severity in the Conditions List Designated is Major, go to 3.3 - Rejecting the Signatory or Product advisor Otherwise, go to 3.2 - Accepting the Product 3.2. Accepting the Product Step Form Description Responsibility 1 APPENDIX B Prepares and fills in the following Designated the Product Acceptance Certificate: Signatory Date - Today's date. Description of Product - Product Id if applicable and the name of the Product, e.g. 'REG - Detailed Design'. Acceptance Category - Tick the appropriate box as follows: If there are any conditions in the Conditions List then tick 'Accepted with attached conditions'. If there are no conditions in the Conditions List then tick 'Fully acceptable' Signed by - Signature above printed name. Role - Use the designated 'Signatory' from the RMO which this procedure implements. Date - Today's date. 2 APPENDIX A Bundles the Acceptance documents Designated together: Signatory APPENDIX B Attach Appendix A - Conditions List to Appendix B - Product Acceptance Certificate. Attach all supporting documentation (SIR's letters, memos, etc.) to Appendix B - Product Acceptance Certificate. 3 Transmits the Acceptance documents Designated to the Go to 3.4 - PMO Acknowledgment. 3.3. Rejecting the Product Step Form Description Responsibility 1 APPENDIX C Prepares and fills in the following Designated portions of the Product Rejection Signatory Notice: Date - Today's date Description of Product - Product Id if applicable and the name of the Product, e.g. 'REG - Detailed Design'. Signed by - Signature above printed name. Role - Use the designated 'Signatory' from the RMO which this procedure implements. Date - Today's date. 2 APPENDIX A Bundles the Rejection documents Designated together: Signatory APPENDIX C Attach Appendix A - Conditions List to Appendix C - Product Rejection Notice. Attach all supporting documentation (SIR's letters, memos, etc.) to Appendix C - Product Rejection Notice. 3 Transmit the Rejection documents to Designated the PMO Go to 3.4 - PMO Acknowledgment. 3.4 PMO Acknowledgment Step Form Description Responsibility 1 Receives Acceptance or Rejection BIR Project documents for a Product from the Director Officer with sign off responsibility for that Product. 2 APPENDIX B or If the documents are headed BIR Project with Appendix B APPENDIX C - Product Acceptance Certificate: Director If there are Major conditions outstanding on the attached form Appendix A - Conditions List then return the documents to the originating officer. Sign either Appendix B Product Acceptance Certificate or Appendix C - Product Rejection Notice. 3 Files a copy of the documents BIR Project Director 4 Transmits the original documents to BIR Project the Project Director of AC-PS Inc. Director 5 END OF PROCEDURE - Current error resolution procedures are used to resolve the issues in the case of Product Rejection. Current billing procedures are used to release payment in the case of a Product Acceptance Certificate being issued. Bureau of Internal Revenue Philippine Tax Computerization Project APPENDIX A CONDITIONS LIST Conditions to acceptance (see attached documents for details): SIR Number Short Description Condition Type Severity APPENDIX B Philippine Tax Computerization Project Bureau of Internal Revenue Product Acceptance Certificat e Date : _______________ To: Project Director AC-PS Inc. We, the undersigned, agree that the deliverable of the product indicated below and delivered by AC-PS Inc. performs to an acceptable standard and meets the requirements identified in the Contract (as modified by Changes Notices) and relevant Acceptance Criteria. It is further agreed that the contractual responsibilities of AC-PS Inc. under the contract for the deliverable of this product have either been completed where no attached conditions exist, or will be completed once the conditions listed in the attachment have been resolved to the mutual satisfaction of the BIR and AC-PS Inc. Description of Product: _______________________ Acceptance Category: Fully acceptable Accepted with attached minor conditions Signed by: ______________________ ______________________ ______________________ ______________________ Role Role ______________________ ______________________ Date Date Noted For and on by: ______________________ behalf of : ______________________ BIR Project Director AC-PS Inc. Project Director ______________________ ______________________ Role Role ______________________ ______________________ Date Date APPENDIX C Philippine Tax Computerization Project Bureau of Internal Revenue Product Rejection Notice Date: ____________ To: Project Director AC-PS Inc. Please be informed that the product indicated below and delivered by AC-PS Inc. does not perform to an acceptable standard. The deficiency is summarized in the attached Conditions List. All Major conditions must be resolved for his product before a Product Acceptance Certificate can be issued. Minor conditions are acceptable at this stage but must be resolved prior to the appropriate later stage delivery. Please make every effort to resolve these issues to the mutual satisfaction of the BIR and AC-PS Inc. Thank you. Description of Product: ____________________________________ Acceptance Category: Rejected | x | Signed by: ______________ ______________ ______________ ( ) Role Date ______________ ______________ ______________ ( ) Role Date Noted by: ______________ Bir Project Director ______________ ( ) Role Date This matrix is used to categorize outstanding conditions of a deliverable for a product into a Major or Minor severity. The strategy is to ascertain the effect the condition will have on the deliverable for a particular product i.e., the symptom , not the cause . The categorization of the condition into Major/Minor then depends on the actual deliverable under scrutiny. For example, if the condition means that no further review is possible, no deliverable can be accepted in this state and so the condition is Major for all deliverables. Where the condition does not block the operational status of the deliverable, but there is a non-conformance with the IFB and contract, the condition is Minor until the Retention payment point is reached. Thus, for a condition which is considered Minor for one deliverable, the same condition may become Major in a later deliverable. Eventually, all outstanding conditions become Major and must be resolved. Condition Types Advnc FSR TSR/ Prog/ RFU/ Man Det System Roll 3 Mnth Rep. Des Test out Live Retntn Type A: The problem is preventing further review n/a Major Major Major Major Major Major Major of the product. For example, part of the product deliverable is missing or `Key System Function' (as defined in the FSR) has not been included. Type B: The system cannot be used operationally until n/a Minor Minor Minor Major Major Major Major the fault is corrected. For example, incorrect calculations or key test conditions not satisfied. Type C: The problem is impending, but not stopping, n/a Minor Minor Minor Minor Major Major Major work in this area. For example, 'sub-functions' (as defined in the FSR) missing or fundamentally faulty and there is no workplan for their inclusion. Type D: Work in this area can continue and the system n/a Minor Minor Minor Minor Minor Minor Major can be used operationally, but correction is required within the contract. For example, documentation and standards infractions (typographical errors). Faults must be documented in SIR`s and should be fixed to an agreed workplan. Bureau of Internal Revenue Product Acceptance Certification Procedure Philippine Tax Computerization Project Appendix E: Product Costs Costs for ITS and IAS Products as per CN53 Billing Model broken down by stages: Payment Point System/ TSR/Man Prog/ RFU/ Product Advnc FSR Rep Det Des System Test Roll out 3 Mnth Live Retntn REG-RDO $60,953.00 $91,429.00 $91,429.00 $60,953.00 $60,953.00 $121,906.00 $921,429.00 $30,476.00 CBR-RDO $60,953.00 $91,429.00 $91,429.00 $60,953.00 $60,953.00 $121,906.00 $921,429.00 $30,476.00 RPS-RDO $85,063.00 $121,595.00 $127,595.00 $85,063.00 $85,063.00 $170,126.00 $127,595.00 $42,532.00 TAS-ROD $81,270.00 $121,906.00 $121,906.00 $81,270.00 $81,270.00 $162,541.00 $121,906.00 $40,635.00 CMS-ROD $81,270.00 $121,906.00 $121,906.00 $81,270.00 $81,270.00 $162,541.00 $121,906.00 $40,635.00 AUD-ROD $57,567.00 $86,350.00 $86,350.00 $57,567.00 $57,567.00 $115,133.00 $86,350.00 $28,783.00 ARS-RDO $40,635.00 $60,953.00 $60,953.00 $40,635.00 $40,635.00 $81,270.00 $60,953.00 $20,318.00 RCS-RDO $20,318.00 $30,476.00 $30,476.00 $20,318.00 $20,318.00 $40,635.00 $30,476.00 $10,159.00 TCR-NO $33,863.00 $50,794.00 $50,794.00 $33,863.00 $33,863.00 $67,725.00 $50,794.00 $16,931.00 TRS-NO $54,180.00 $81,270.00 $81,270.00 $54,180.00 $54,180.00 $108,361.00 $81,270.00 $27,090.00 ETR-NO $27,090.00 $40,635.00 $40,635.00 $27,090.00 $27,090.00 $54,180.00 $40,635.00 $13,545.00 NO MIS $60,953.00 $91,429.00 $91,429.00 $60,953.00 $60,953.00 $121,906.00 $91,429.00 $30,476.00 LIS-NO $20,318.00 $30,476.00 $30,476.00 $20,318.00 $20,318.00 $40,635.00 $30,476.00 $10,159.00 HRS-NO $28,445.00 $213,335.00 - - - - $28,445.00 $14,222.00 PAS-NO $15,238.00 $114,287.00 - - - - $15,238.00 $7,619.00 AFS-NO $30,476.00 $45,715.00 $45,715.00 $30,476.00 $30,476.00 $60,953.00 $45,715.00 $15,238.00 Note to costs Payment Point definitions and percentage breakdown: Percentage Abbreviation Billing model text of total cost of System Advnc Advance Payment 10% FSR Functional Specs 15% TSR/Man Rep Technical Specs/Management Report 15% Det Des Detailed Design Sign-off 10% Prog/System Test Programming Sign-off/System Test Sign-off 10% RFU/Roll out System Roll-out at Pilot Sites/"Ready for Use" 20% 3 Mnth Live Pilot Site/NO 3-Mo Live Oper 15% Retntn Retention 5% System abbreviations Abbreviation Full Name REG Registration CBR Collection and Bank Reconciliation RPS Returns Processing TAS Taxpayer Accounting CMS Case Monitoring AUD Audit ARS Accounts Payable RCS Returns Compliance TCR Tax Credits and Refunds TRS Tax Reconciliation ETR Excise Tax Reconciliation NO MIS National Office Management Information System LIS Legal Information System HRIS Human Resource FAS Fixed Assets AFS Accountable Forms Bureau of Internal Revenue Product Acceptance Certification Procedure Philippine Tax Computerization Project Appendix F: Glossary GLOSSARY Short Name Description AC-PS Inc. Anderson Consulting-Philippine Sun Incorporated ACIR Assistant Commissioner of Internal Revenue BIR Bureau of Internal Revenue CIR Commissioner of Internal Revenue CN Change Notice COA Commission on Audit DCIR Deputy Commissioner of Internal Revenue DOF Department of Finance IFB Invitation For Bids PMO Project Management Office PSC Project Steering Committee Chairman PTCP Philippine Tax Computerization Project SIR System Investigation Report Bureau of Internal Revenue Product Acceptance Certification Procedure Philippine Tax Computerization Project Appendix G: Flowchart FLOWCHART Note: The timeframe by which this process must be carried out is indicated in the relevant Change Notices listed in 1. Introduction, Related Documents. ATTACHMENT 2 LIST OF DESIGNATED SIGNATORIES OF VOUCHERS FOR THE PTCP Deliverable Signatory Goods 10% Advance Payment for Incremental Commissioner of Internal Revenue Goods Cost under CN 98: Shift to Seven Data Centers 5% Retention on Goods Cost Commissioner of Internal Revenue Hardware/Miscellaneous Equipment for ACIR for ISOS Production at the National Office Hardware/Miscellaneous Equipment for RDC or RO or RDO Head (for sign-off of Production at the Revenue Data acceptance) Centers/Regional Office/Revenue District DCIR for Information Systems Group or Office representative* (for signing of Disbursement Voucher) Site Preparation at the National Site Preparation Project Manager Office/Revenue Data Centers/Revenue District Office Training Equipment ACIR for HRDS Project vehicles PMO Project Director or representative * Software for Development (Oracle) ACIR for ISDS Communication Installation Charge (One DCIR for Resource Management Group or time charge for installation of representative * communication lines) Integrated Tax System/Internal Administrative Systems - Functional Specifications Report (FSR) Project Steering Committee Chairman - Management Report Project Steering Committee Chairman - Technical Specifications Report (TSR) ACIR for ISDS - Detailed Design ACIR for ISDS - Programming ACIR for ISDS - System Test Project Steering Committee Chairman - Ready for Use Integrated Committee Chairman - Pilot Acceptance Commissioner of Internal Revenue or representative * * representatives should have written authorities ATTACHMENT 3 Required Attachments for AC-PS Invoices A. GOODS SIGNATORY COST CATEGORY Attachments Remarks Commissioner Advance Payment (10%) 1. Related Change Notice * requires initials of Project Director, Retention (5%) 2. Price Summary/Billing Model DCIR for ISG and Asst. Project Director ACIR for ISOS HW/Miscellaneous Eqpmt 1. Certificate of Acceptance DCIR for ISG or rep (N.O.) 2. Delivery Receipts HW/Miscellaneous Eqpmt 3. Inspection and Acceptance Report ACIR for HRDS (RDC/RO/RDO) 4. Related Change Notice RMO Project Director or rep Training Equipment 5. Receipts of Third Party Suppliers Site Preparation Project Manager Project Vehicles (if applicable) Site Preparation ACIR for ISDS Software for Development 1. Third Party Supplier Contract (Oracle) 2. Third Party Statement of Accounts 3. Related Change Notice DCIR for RMG or rep Communication Installation 1. Certificate of Acceptance Charge 2. Delivery Receipts 3. Inspection and Acceptance Report 4. Related Change Notice 5. Receipts of Third Party Suppliers (if applicable) Application-ITS/IAS Interrelated Deliverables: PSC Chairman per system FSR, Mgmt. Report, System Test 1. Acceptance Sign-off w/ attached * TSR voucher requires an initial of ACIR for ISDS TSR, Detailed Design, matrix of unresolved issues for PSC Chairperson to signify the Programming conditional sign-off acceptance of Management Report Integration Committee Ready for Use 2. Related Change Notice * System Test voucher requires an Chairman Pilot Acceptance (ITS/IAS) initial of ACIR, ISDS to signify Commissioner or rep the acceptance of programming * Ready for Use voucher requires initials of system owner and ACIR of ISOS to signify the acceptance of software components and other deliverables prescribed under CN No. 146 (Ready for Use Sign-off Framework and Criteria) * Pilot Acceptance requires initial of DCIR, ISG, Integration Manager, PMO Assistant Project Director B. SERVICES SIGNATORY COST CATEGORY Attachments Remarks PMO Project Director or rep Project Management 1. Monthly Time Sheets (if applicable) e.g. (PD, PCO, ASM, TC, Admin. - w/ approval of Project Control Staff Qlty. Assurance Team, Officer and signed by the respective PSPI Support Personnel Project Managers 2. Accomplishment Report (or service ACIR of ISOS Facilities Management (N.O) report) - list of services rendered for the DCIR for ISG or rep Facilities Management month (RDC/RO/ or RDO) Sign-off letter of Signatory ACIR for ISOS - for the acceptance of Hardware Maintenance goods/reports delivered DCIR for ISG or rep (N.O.) 3. Related Change Notice Hardware Maintenance ACIR for HRDS (RDC/RO/ RDO) Training Personnel e.g. (Training Mgr., Change PMO Project Director or rep Mgmt. Personnel, Business Training/ Process) Administrative Services ACIR for ISDS Software Maintenance 1. Third Party Contract 2. Third Party Statement of Accounts 3. Related Change Notice ACIR for HRDS Training Conduct 1. Training Acceptance Report by the Notice of Training Delivery and Training Committee Evaluation Summary should be 2. Attendance Sheet made 3. Related Change Notice available to the Training Committee before release of Training Acceptance Report PMO Project Director or rep Expat OPEs 1. List of Out of Pocket Expenses 2. Contract w/ third party (if applicable) 3. Third party/supplier receipts or statement of accounts ATTACHMENT 4 Invoice Processing Workflow N.B. The above workflow assumes that the documents being processed are "good". If there are problems at any point in the workflow, the invoice, together with a written documentation of the issue/s, will be referred to Internal Audit who shall refer the matter to the concerned parties or convene the Task Force if necessary. Services Project Management PMO Project Director or representative * Facilities Management RDC Head of Head of the Unit to which FM staff reports (for sign-off of acceptance) and DCIR for ISG or representative * (for signing of Disbursement Voucher) or ACIR, ISOS for N.O. FM) Hardware Maintenance RDC Head or Head of the Unit to which Hardware belongs (for sign-off of acceptance) and DCIR for ISG (for signing of Disbursement Voucher); or ACIR, ISOS for N.O. Hardware Maintenance Training (Personnel) ACIR for HRDS Administrative Services PMO Project Director or representative* Software Maintenance ACIR for ISDS Training Conduct ACIR for HRDS Expat OPEs PMO Project Director or representative* Consumables Consumables (Office Supplies, OPEs, Division Chief, FTSD Photocopying cost, Computer Lease) Communication Line Cost DCIR for Resource Management Group or representative* Software Ready for Production (MS-Office) Division Chief, FTSD Software Ready for Production (SAS, SSA-Name) ACIR, ISDS Software Ready for Production PSC, LIS (Phil./American Legal Text) * representatives should have written authorities Crown Agents Philippine Tax Computerization Project Memorandum Date : October 7, 1996 For : Carol Carreon, Lilia Guillermo, Leo Espinoza Thru : From : Steve Roach cc : David Nilsen Subject : Acceptance Procedure Orientation I had a meeting yesterday with David Nilsen in the AC-PS offices where some concerns were raised regarding the implementation of the Acceptance Procedures which have been released as part of a recent RMO. There are two concerns: Enhancements During the issue resolution, enhancements will inevitably be raised as conditions. This is likely to arise because of the difficulty in classifying some issues as bugs or enhancements. This difficulty is common at this stage of a project and I am currently working on a procedure to assist with this process. While AC-PS are prepared to take an active role in this classification process, they are concerned that outstanding enhancements will be attached to the deliverables as outstanding conditions. This should not be allowed to happen. Enhancements have no place in acceptance and should be dealt with separately. Functional Issues Functional issues (i.e. issues which challenge the delivered functionality against the IFB, not issues which challenge the delivered functionality against the FSR) should not be attached to deliverables as conditions. There has recently been considerable effort to resolve these issues outside the acceptance process and any further functional issues of this type could be resolved using the same process. I am assuming that the current outstanding functionality issues are not linked to any acceptance point before retention and that they will be address to an agreed timetable. Non compliance with the FSR remains a condition for acceptance. In my opinion, these concerns are genuine in the light of the actual practices in use before the RMO was release. May I suggest that, during the orientation of the people who will be implementing the RMO, a policy statement is given as guidance to the use of the procedure. It may be prudent to reissue the RMO at a future date with changes aimed at realigning the implementation of the procedure in the light of actual experience. These concerns may usefully be addressed at this time. I do not recommend reissuing the RMO at this time because of the confusion this could cause and the amount of management time this would require. There is also an need to implement the procedure as soon as possible.