Section 242.1104 - Surveillance requirements(a) The cognizant contract administration office (CAO)- (i) Shall perform production surveillance on all contractors that have Criticality Designator A or B contracts;(ii) Shall not perform production surveillance on contractors that have only Criticality Designator C contracts, unless specifically requested by the contracting officer; and(iii) When production surveillance is required, shall- (A) Conduct a periodic risk assessment of the contractor to determine the degree of production surveillance needed for all contracts awarded to that contractor. The risk assessment shall consider information provided by the contractor and the contracting officer;(B) Develop a production surveillance plan based on the risk level determined during a risk assessment;(C) Modify the production surveillance plan to incorporate any special surveillance requirements for individual contracts, including any requirements identified by the contracting officer; and(D) Monitor contract progress and identify potential contract delinquencies in accordance with the production surveillance plan. Contracts with Criticality Designator C are exempt from this requirement unless specifically requested by the contracting officer. 69 FR 31912 , June 8, 2004