Property Administration: What in the World Are We Looking For?

Transcription

1 Western Region Fall Education Seminar Salt Lake City, Utah 2015 Property Administration: What in the World Are We Looking For? Presented By: Tracy A. Helmick, CPPM NASA, MSFC IPO PEAKING YOUR INTEREST IN ASSET MANAGEMENT

2 Expectations No losses or less than 0% errors Inventory property coming to you, from you and for us Keep the listing current for us in the contract Provide your own property to perform contract Figure out what we mean not what we say

3 Realistic Expectations We want contractors to have an efficient, economic and uniform property management system (PMS) to acquire, control, use, protect and dispose of property required to perform the contract which incorporates Industry Leading Practices (ILPs), Voluntary Consensus Standards (VCS) and Customary Commercial Practices for continuous improvement.

4 FAR Property Management System (PMS) FAR (b)(1) April 2012 The Contractor shall have a system of internal controls to manage (control, use, preserve, protect, repair, and maintain) Government property in its possession. The system shall be adequate to satisfy the requirements of this clause. In doing so, the Contractor shall initiate and maintain the processes, systems, procedures, records, and methodologies necessary for effective and efficient control of Government property. The Contractor shall disclose any significant changes to its property management system to the Property Administrator prior to implementation of the changes. The Contractor may employ customary commercial practices, voluntary consensus standards, or industry-leading practices and standards that provide effective and efficient Government property management that are necessary and appropriate for the performance of this contract (except where inconsistent with law or regulation).

5 Responsibility of the Contractor Develop or prepare a PMS which consists of written procedures for all processes which meet FAR and contractual requirements, to include incorporation of applicable ILP & VCS. Comply with your PMS and procedures. Disclose significant changes to PMS to the Property Administrator prior to implementation. Perform self assessments. FAR ( b)(1), Property Management and f. 3 Contractor Plans and Systems. NFS Property Management Changes.

6 VCS & ILPs FAR clause 2007 to April 2012: The system shall be adequate to satisfy the requirements of this clause. In doing so, the Contractor shall initiate and maintain the processes, systems, procedures, records, and methodologies necessary for effective control of Government property, consistent with voluntary consensus standards and/or industry-leading practices and standards for Government property management except where inconsistent with law or regulation. Not optional the Contractor SHALL include VCS & ILPs in their property management systems. This was instituted by law. See next slide for FAR Clause update

7 April 2012 Update April 2012 The Contractor may employ customary commercial practices, voluntary consensus standards or industry leading practices. (Approval of property systems has also come full circle, as DOD now requires business systems approvals)

8 VCS, ILP, CCP Definitions: VCS: Voluntary Consensus Standards are standards developed or adopted by voluntary consensus standards bodies (such as ASTM, ISO although there are many other consensus bodies), both domestic and international made available to all at a minimal or no cost basis. ILP: Industry Leading Practices are strategies and processes that are both quantifiably and qualitatively demonstrated to be top performing. CCP: Common commercial practices (CCP) repeatedly recognized, used and performed in like markets and business areas. Customary: commonly practiced, used or observed Commercial: : designed for a large market ; emphasizing skills and subjects useful in business Practice: to perform or work at repeatedly so as to become proficient

9 Why do we require VCS, ILP & CCP? VCS, ILPs and Customary Commercial Practices where specified, qualified and quantified give a good overview and standard by which to evaluate systems, processes and procedures which should assure the Government and reviewing officials that property is safeguarded, tracked and accounted for in at the least an established and best common practice, or in a manner that exceeds the best practices.

10 Property Management Roles & Responsibilities of the Government Contracting Officer: is responsible for overall management of their contracts, including the management of Government property provided to contractors. Responsibilities include documenting decisions to provide property, including authorization for contractors to purchase property as a direct cost to the Contract IAW FAR and NFS , processing modifications to the contract for adds or deletes of property, and delegating or assigning Property Administration (PA) and Plant Clearance. Administrative Contracting Officer (ACO): refers to a CO who is administers contracts. New DFARS rule requires CO, or delegated ACO approval of business systems. The Property Management system is one of the defined systems. Note: Overall Property Management oversight is a responsibility of the CO. Reference FAR 42 & DFARS Case 2009 D038

11 Property Management Roles & Responsibilities of the Government NASA Industrial Property Officer (IPO): is the individual appointed by the NASA Center Director to have oversight responsibility for all center contract property management. Review RFPs/RFQ, contracts, modifications, proposals for property management responsibilities and regulations, advise CO s on assignment or delegation of Property Administration or Plant Clearance. Monitor PA and PLCO activities, accept reports of contractor held property. Property Administrator (PA): is the authorized representative of the Contracting Officer (CO) appointed in accordance with agency procedures, responsible for administering the contract requirements and obligations relating to Government property in the possession of a contractor.

12 Role of a Government Property Administrator (GPA) or PA Serves as the Government representative for property management oversight of contractor held property Advises the CO & IPO of property management issues and transactions Reviews the Property Plan & PMS Conducts Property Control Systems Analysis (PMSA) or Property Management Systems Analysis (PMSA) Provides input to Procurement teams for pre-award document and proposal reviews Grants relief of responsibility where appropriate for losses REFERENCES: FAR 45, DFAR , NFS 1845, FAR , Systems Analysis FAR (g)

13 Prior to Award Considerations Request for Proposal/Proposal Evaluation: Full Disclosure we have to make sure the field is leveled in respect to furnished gfp. To include use & rents, other gfp to be used on non-rent, noninterference basis. Government Assumption of Risk Because the government is assuming the risk of loss it is important that the CO & PA evaluate the contractors property plan and processes prior to award. PA s may help provide lists of property or recommend transition activities. FAR 45.2, NFS & 81

14 Solicitation Clauses Government Property Management Information Requires contractor to provide property management system information, last PMSA/PMSA results, any property they intend to use from other contracts, cost accounting practices for general purpose equipment and property they intend to acquire for the performance of the contract to be provided with proposal , List of Available Government Property Section for property offered under standard FAR Government Property Clause Section for property offered under FAR clause AS-IS, Where Is

15 GFP FAR GFP (for NASA primarily off-site contracts): The Government retains title to both property provided to or acquired by the contractor in performance of the contract. Is normally located at the contractor s site. Listed in the contract as GFP. The contractor is accountable for both GFP and CAP which is reported annually on NF Title does not convey to a Grantee for GFP provided to Grants. Property administration and plant clearance for off-site contracts is delegated to DCMA or ONR. This function defaults to the CO if not delegated.

16 Onsite/Installation Operations Services FAR FAR Initial Provisioning only. Onsite operations, fixed price only. Property that becomes unserviceable, or broken becomes property of the Contractor. The contractor is to repair or remove at their expense. If the property remains serviceable throughout the life of the contract or becomes excess to the needs of the contractor, the government retains title. Otherwise title conveys to contractor.

17 Onsite IAGP NFS NFS , Installation Accountable Government Property (IAGP), Property is accountable to the Government, the contractor has user responsibilities. However, Property not recorded in NASA property systems must be managed in accordance with the requirements of the clause at FAR , as incorporated in this contract. Property Administration is performed on contracts with large amounts of IAGP which are not recorded in NASA systems.

18 PMSA(Audit) 2 =Stress For the contractor audits or assessments multiplied by x (fill in the blank) can be stressful For the PA audits can stressful when less prepared and/or where there are deficiencies Goal is to minimize the stress of the situation, by covering each area. Know the contract requirements, familiarize yourself with the Property Plan and processes.

19 Conducting the PMSA NASA Procedural Requirements (NPR) 4500 Review contract, Property Plan, procedures Review prior PMSA reports/findings Use questionnaire(s) Complete sample worksheets Make sure that PMSA backup provides adequate information to document records and information reviewed Create/mark off Checklists

20 PMSA Documentation Reports should document the process and methods used to test functional areas/outcomes. The sample population and sets, as well as a summary of findings should be detailed, i.e. x number of x records were reviewed, with no errors/or x number of errors. Where findings require correction and disclosure to the contractor these can be detailed in a separate letter format per functional area/process outcome Provide results by each segment indicating satisfactory, unsatisfactory or partially satisfactory. Contractor actions should be noted and assessed as to whether or not it is sufficient to correct issues Areas not reviewed or not applicable should be noted

21 Findings The PA must determine if a finding is a normal data entry error, minor discrepancy or anomaly or if the problem is systemic or serious in nature requiring corrective actions. Random sample checks are designed to be a reasonable assessment of the full population of records and provide expectation that findings will be typical when the sample sets are repeated. Specific or Judgment samples can also be used where warranted, but do not provide a full population review. When there are findings which are determined to be deficiencies we detail the issue that needs to be corrected, not how to correct it. The contractor then proposes steps and actions to correct, and the PA evaluates the adequacy.

22 Errors and Deficiencies Anomalies which are within a normal error rate, should be expected, but should not be repeated with additional sample checks. Errors that are repeated represent a deficient system. Systemic deficiencies that the PA determines increase significantly risk of loss or repeated loss, mission or schedule delays, safety to personnel or public, or increased cost require immediate correction.

23 Overall Desired Results of PMSA The PA wants to be assured that processes, procedures and systems are in place to protect, safeguard, track and account for government property in accordance with policy and contractual requirements. We will look at the contract, regulatory requirements, property plan, policies, procedures, systems, samples, documentation, and physical inspection to make assessment.

24 Self Audits Self Audits- encourages contractors to find and correct deficiencies or identify best practices, before the PMSA. FAR (b)(4) The Contractor shall establish and maintain procedures necessary to assess its property management system effectiveness, and shall perform periodic internal reviews and audits. Significant findings and/or results of such reviews and audits pertaining to Government property shall be made available to the Property Administrator. The PA will generally will not assess the same findings as Contractor self assessments, if corrective actions are being worked and are satisfactory to correct issues. Self audits/assessments do not replace PMSA.

25 Property Management Plan The PA must review the Property Plan to make sure it covers all areas of Property Management and meets the requirements of the contract, as well as Center policies and procedures outlined in the contract. Need more emphasis on making sure the contractor s plan is detailed and comprehensive

26 Functional Areas/ Process Outcomes

27 Property Management includes: Overall Property Management System effectiveness Policy Procedures Self Audits Property Processes outlined in FAR FAR (b)(1-4), ASTM Standards: E , E , E e1, and E

28 Review of 10 Property Processes: 1. Acquisition 2. Receiving Identification 3. Records 4. Physical Inventory 5. Subcontractor Control 6. Reporting 7. Relief of Stewardship Responsibilities Disposal 8. Utilization Consumption Movement Storage 9. Maintenance 10.Closeout

29 Acquisition Authority to purchase or acquire (CO or contract terms & conditions) Existing or on hand inventory screened before purchase Correct source identified: GFP or contractor acquired Items ordered for quantities stipulated in the contract and flowed down to ordering organization Identification- Property is properly classified and labeled with barcode labels/unique identifiers upon fabrication or receipt FAR (f)(1)(i), NFS Contractor Requests for Government Provided Equipment, NFS Identification & Marking, ASTM E2453 and E

30 NFS Contracting officers shall review the contractor s requests for provision of Government equipment under the clause at to determine whether authorizing the provision of Government property is an appropriate business decision according to the policy at NFS (Requisition/Acquisition of Property): The Contractor is not to acquire or construct equipment without the Contracting Officer s written authorization. Only exception is any component of or deliverable end item. To requisition property the contractor must submit in writing to the CO to: 1) Justify the need; 2) Explain why contractor-owned property cannot be utilized; 3) Describe in detail sufficient to screen for excess, and 4) Combine items and quantities (as long as under $500K) Intent is to ensure CO prior approval and to alert Finance.

31 Receiving of Government Property Property received inspected for discrepancies Discrepancies segregated/documented and/or investigated (i.e. partial shipments, shortages/overages). Carrier signatures obtained Items reconciled against requisition/po Detailed receiving report prepared/distributed to appropriate offices FAR (f)(1)(ii)

32 Additional Receiving Requirements Onsite NFS without the Alternate which requires offsite delivery, requires prior notification to NASA Center Central Receiving of incoming vendor deliveries. Prior to Jan 2011 clause required DD1149 within 5 days of receipt of property onsite. Clause does not specify controlled property threshold for documentation of receipts. Post Jan 2011 MSFC is giving 15 days for equipment, and 30 days for materials to be documented on MSFC Form 4554, or DD1149.

33 Records of Government Property Basic information as required by FAR Source documentation or references retained (i.e. purchase documents/receiving reports, transfer documents) Records are accurate and up to date FAR (f)(1)(iii), NFS , NFS Records and Disposition Reports for Government Property with Potential Historic or Significant Real Value, Standard: ISO VCS 15489, 2001

34 FAR Elements of Property Record FAR (f)(1)(iii) Records of Government property. The Contractor shall create and maintain records of all Government property accountable to the contract, including Government-furnished and Contractor-acquired property. (A) Property records shall enable a complete, current, auditable record of all transactions and shall, unless otherwise approved by the Property Administrator, contain the following: (1) The name, part number and description, National Stock Number (if needed for additional item identification tracking and/or disposition), and other data elements as necessary and required in accordance with the terms and conditions of the contract. (2) Quantity received (or fabricated), issued, and balance-on-hand. (3) Unit acquisition cost. (4) Unique-item identifier or equivalent (if available and necessary for individual item tracking). (5) Unit of measure. (6) Accountable contract number or equivalent code designation. (7) Location. (8) Disposition. (9) Posting reference and date of transaction. (10) Date placed in service (if required in accordance with the terms and conditions of the contract).

35 NFS ID and Marking of Government Property NFS Identification and Marking of Government Equipment, Concurrent with equipment delivery or transfer, the Contractor shall provide the following data in an electronic spreadsheet format: (1) Item Description. (2) Unique Identification Number (License Tag). (3) Unit Price. (4) An explanation of the data used to make the unique identification number. d) For equipment no longer needed for contract performance and physically transferred under paragraph (a) of this clause, the following additional data is required: (1) Date originally placed in service. (2) Item condition (f) The contractor shall include the substance of this clause, including this paragraph (f), in all subcontracts that require delivery of equipment.

36 Physical Inventory Inventories conducted on frequency agreed to by PA Inventories taken by personnel other than those having accountability of the property Inventory results and discrepancies promptly reported to the PA Property physically touched manually or electronically (verification) FAR ( f)(iv), NFS Physical Inventory of Capital Personal Property, ASTM E & E

37 Physical Inventory Considerations FAR Requirement: FAR (f) (iv) Physical inventory. The Contractor shall periodically perform, record, and disclose physical inventory results. A final physical inventory shall be performed upon contract completion or termination. (PA may waive final inventory) Different methods of Physical Inventory: wall to wall, cyclic, inventory by exception. PA will test stated process and frequency per Property Plan. Assess effectiveness of inventory methods. Completeness of Report. Report should contain: No. of items to be inventoried, found, not found, discrepancies, and a statement that all records have been reconciled and are accurate. Contracts with NFS require annual inventory of Capitalized assets to be submitted. Method of inventory can be determined by the contractor.

38 Subcontractor Control Subcontracts contain flow down of property requirements (not the clauses themselves) and furnished property listings CO approval of subcontractors relieved of liability or risk of loss Prime contractor system established to analyze and assess adequacy of sub records, control, protection, preservation & maintenance Subcontractor reports to prime any losses, damage or destruction Examine Prime contractor requests for subdelegations of Subcontractor Property Administration FAR (b)(3) and (f)(1)(v)

39 Evidence of Contractor Flow Down of Requirements Can be an example of contract terms and conditions Signed acknowledgement by the subcontractor Consider all requirements of the prime contract Additionally, the prime contractor must provide evidence of assessment of their subcontractors property management systems

40 Reports Discrepancy reports Loss, Damage, Theft or Destruction reported promptly Physical inventories reports are completed Excess/Disposal reports submitted as required SF 1428 Inventory Disposal Schedule Reports of Audits & Self Assessments Any additional Contractual reports accurate and submitted on time. NFS Financial Reporting of NASA Property in the Custody of Contractors (NF 1018) FAR (f)(1)(ii)(A), (f)(1)(vi), and (f)(1)(iv).

41 1018 Reporting Non-CHATS reporting contractors reports are due by 10/15 for period ending 9/30. CHATS reporting contractors are given an additional 45 days to complete by 11/30. Bottom line of 1018 should be all property on hand and any acquisitions received but not transferred as of 9/30. Adjustments should be investigated, documented/foot noted and the contractor should explain what happened and what is being done to prevent future adjustments.

42 PA Validation & Review of Reports NF 1018: PA should understand where the contractor is obtaining information for the report. Some PA s require entire listings, other PA s require changes to prior period amount reports only Loss reports require assessment of completeness of the report, determination of Contractor s managerial personnel involvement, assessment of contractor s recommended actions to prevent further losses or damage Discrepancy report reviews require assertion of correction or resolution of discrepancies. The Contractor must have written procedure or instructions detailing reporting process, which includes error reporting (IPO notification)

43 Relief of Stewardship Responsibilities Disposition instructions provided by the Plant Clearance Officer (PLCO) OR CO are obtained before disposition Disposal of property is IAW contractual requirements and is properly documented The quantity, condition code and location are reported accurately for property items requiring disposition ID tags removed, and documentation retained for sale/scrapped items Relief of responsibility received from PA for Loss, Damage, Theft or Destruction Proceeds credited or submitted as directed FAR (f)(vii), (h),(j) & (k)

44 Evaluation of Relief of Stewardship The contractor is required to keep records which document relief of stewardship DD1149 or Form 4554 should be complete with all required signatures (the initiator of the form has the responsibility to obtain final report with all signatures) (challenge MSFC SEMO requires User signature, this is not required by the contractor, only providing the name of the POC/End User) Pick up or final plant clearance cases should be documented and processed in a timely manner.

45 Loss Reports (B) Unless otherwise directed by the Property Administrator, the Contractor shall investigate and report to the Government all incidents of property loss as soon as the facts become known. Such reports shall, at a minimum, contain the following information: (1) Date of incident (if known); (2) The data elements required under (f)(1)(iii)(a); (3) Quantity; (2) (4) Accountable contract number; (5) A statement indicating current or future need; (6) Unit acquisition cost, or if applicable, estimated sales proceeds, estimated repair or replacement costs. (7) All known interests in commingled material of which includes Government material; (8) Cause and corrective action taken or to be taken to prevent recurrence; (9) A statement that the Government will receive compensation covering the loss of Government property, in the event the Contractor was or will be reimbursed or compensated; (10) Copies of all supporting documentation; (11) Last known location; (12) A statement that the property did or did not contain sensitive, export controlled, hazardous, or toxic material, and that the appropriate agencies and authorities were notified. (C) Unless the contract provides otherwise, the Contractor shall be relieved of stewardship responsibility and liability for property when (1) Such property is consumed or expended, reasonably and properly, or otherwise accounted for, in the performance of the contract, including reasonable inventory adjustments of material as determined by the Property Administrator; (2) Property Administrator grants relief of responsibility and liability for loss of Government property; (3) Property is delivered or shipped from the Contractor's plant, under Government instructions, except when shipment is to a subcontractor or other location of the Contractor; or (4) Property is disposed of in accordance with paragraphs (j) and (k) of this clause. per FAR (f)(viI)(B)

46 Loss Reports Generally, the government retains the risk of loss and contractors are not held liable. Except losses where there is willful misconduct, or lack of good faith on the part of management personnel, where the property is insured or where the full risk of loss has been given to the contractor through FAR , Alt 1. Loss reports must contain all required data per FAR (f)(vii)(B) PA s grant relief where appropriate, but only the CO can rescind the governments assumption of risk and/or hold the contractor liable NFS Liability for GP Furnished for Repair or Other Services liable for LTD&D where they have been negligent in care or diligence in safeguarding

47 Utilization of Government Property Methods established to insure Government property is used only for the purposes authorized by the contract Contractual authorization obtained to use property for other than original authorized purposes (non-interference basis, rental, etc) System established to review and identify excess property (promptly) FAR (f)(viii)

48 Utilization continued Movement Proper authority for movement obtained and documented System in place to control movement and location of property System to update records for movement activities Moved property is protected, preserved and inspected to prevent loss, damage and the deterioration FAR (f)(1)(viii)(A), ASTM E

49 Utilization continued Consumption Property consumed only under contract performance Stock records system maintained for consumable items Stock records documented with issue information Reasonable consumption rate Process for analysis and investigation of consumption above to planned use FAR (f)(iii)(B) Use of a Receipt and Issue System for Government Material. When approved by the Property Administrator, the Contractor may maintain, in lieu of formal property records, a file of appropriately crossreferenced documents evidencing receipt, issue, and use of material that is issued for immediate consumption.

50 Utilization continued Storage Adequate safeguards in place for securing government property (safety, security, etc) Access to area controlled Government property segregated from the contractor property A first/first out system established for stored items subject to expiration Adequate housekeeping for stored property

51 Maintenance of Government Property Program established consisting of systematic written procedures for servicing and inspecting equipment Safe, efficient and economical operation of government property (Preventative care, routine repair, emergency repair or calibration as required) Records maintained for repairs or calibration Return Maintenance Authorizations (RMA) documented and tracked, record adjustments processed System capable of identifying high costs for maintenance Maintenance performed within contractual requirements Prior CO approval for major repairs/upgrades FAR (b), (f)(ix)

52 Contract Closeout Proper CO authority to transfer property to another contract Inventory adjustments and liability determinations completed before closeout Lists provided for Government disposition instructions All records complete and reconciled FAR (f)(1)(x)

53 Conclusion Know the contract requirements Know your procedures and Property Plan Participate or review Self Assessments Encourage continuous improvement Be active in creating and reviewing standards Work with your PA, organization & program to meet shared goals. The relationship is a team effort, not us/them. As the PA you are evaluating the effectiveness of system not the person. First and foremost the PA s responsibility is to make sure GP is tracked, protected and efficiently managed. As a contractor you are tracking, safeguarding and utilizing GP in an efficient manner.

54 Questions??

55 Contact Information: Tracy A. Helmick, CPPM NASA MSFC IPO (256)