Here are the severity level descriptions based on the DCMA website.
Level I CAR is issued when a contractual non-compliance requires no special management attention to correct. Level I CARs are directed to the supplier management level responsible for correcting the non-compliance.
Level II CAR is a request for corrective action for contractual non-compliances that are systemic in nature and/or could adversely affect cost, schedule, or performance if not corrected. A Level I CAR may be escalated to a Level II CAR as the result of Level I CARs for the same types of non-conformances, across several programs/contracts or several Control Account Managers, indicating a systemic issue. Level II CARs are directed to the supplier management level responsible for the process with a copy to the responsible ACO.
Level III CAR identifies issues where cost, schedule, technical performance, resources, or management process issues have unfavorably affected program performance and have not been corrected by the supplier. A Level III CAR need not be preceded by a Level I or Level II CAR. A CAR may also become a Level III after Level I and/or Level II attempts have failed and escalation is warranted OR in the case where the situation is deemed serious enough to warrant higher level attention. Failure to meet requirements cited in a CAR may include, but is not limited to, poor or incomplete corrective action plan, poor or missing root cause analysis, irreconcilable differences between DCMA and supplier. The supplier’s failure to appropriately correct non-compliance in a Level III CAR shall result in an escalation from Level III to Level IV.
A Level III CAR is addressed to the supplier's (site specific) top tier business manager. Level III CARs may be coupled with contractual remedies such as reductions of progress payments, cost disallowances, cure notices, show cause letters, or management systems disapprovals. Level III CARs may trigger formal reviews such as post award review for cause, compliance reviews, or other system validation reviews and may result in suspension or revocation of EVMS certification. When Level III CAR is closed, copies of the closed CAR should be sent to all those addressed and/or copied in the original CAR, as appropriate.
Level IV CAR identifies issues where cost, schedule, technical performance, resources, or management process issues have unfavorably affected program performance across multiple programs or multiple sites; and have not been corrected by the supplier. A CAR also becomes a Level IV after Level III attempts have failed and escalation is warranted. The CAR should be addressed at the supplier's corporate level.
A Level IV CAR is issued to advise the supplier of contractual remedies such as suspension of progress payments or product acceptance activities, termination for default, and suspension or debarment, in accordance with applicable FAR/DFARS policies and procedures. Level IV CARs may trigger formal reviews such as post award review for cause, compliance reviews, or other system validation reviews and may result in suspension or revocation of EVMS certification. When a Level IV CAR is closed, copies of the closed CAR should be sent to all those addressed and/or copied in the original CAR, as appropriate.
Cause(s) of the nonconformity.
Actions taken or planned to eliminate the cause(s) and prevent recurrence of the nonconformity, to include addressing people, process, and/or tools.
Actions taken to correct the specific nonconformity.
Whether other processes are affected.
Whether other products/services are affected, including product already delivered to the customer.
Action taken to correct the weakness which allowed deficient product to be presented to the government for acceptance.
Target date(s) for implementation of planned actions.
Source: http://www.dcma.mil/policy/1201/DCMA-INST-1201.pdf
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