Property Administration:
What in the World are
We Looking For?
Presented By
Tracy A. Helmick, CPPM
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
Expectations
Realistically – 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) and Voluntary Consensus
Standards (VCS) and Customary Commercial
Practices (CCP) for continuous improvement
Property Management System
(PMS) FAR 52.245-1
FAR 52.245-1 (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.
Responsibility of the Contractor
• Develop or prepare a PMS which consists of written
procedures for all processes which meet FAR
52.245-1 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 52.245-1( b)(1), Property Management and f. 3 Contractor Plans
and Systems. NFS 1852.245-75 Property Management Changes.
VCS & ILPs
FAR clause 2007 – to April 2012:
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 (See next slide
for FAR Clause update)
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)
Definitions:
VCS: Voluntary Consensus Standards are standards developed or
adopted by voluntary consensus standards bodies (such as
ASTM, ISO)
ILP: Industry Leading Practices are processes that are both
quantifiably and qualitatively demonstrated to be top
performing.”
CCP: Customary Commercial Practices (CCP) 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
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.
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.
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.
Property Management Roles &
Responsibilities of the Government
NASA Industrial Property Officer (IPO): Appointed by
each NASA Center Director to have oversight
responsibility for all center contract property
management activities, accept reports of contractor
held property.
Property Administrator (PA): is the authorized
representative of the Contracting Officer (CO),
responsible for administering the contract
requirements and obligations relating to
Government property in the possession of a
contractor.
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 252.245, NFS 1845, FAR 52.245-1, Systems Analysis FAR
52.245-1(g)
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.
FAR 45.2, NFS 1852.245-80 & 81
Solicitation Clauses
1852.245-80 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.
1852.245-81, List of Available Government Property
GFP FAR 52.245-1
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 1018.
• 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.
Onsite/Installation Operations
Services FAR 52.245-2
FAR 52.245-2 – 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.
Onsite IAGP NFS 1852.245-71
NFS 1852.245-71, Installation Accountable
Government Property (IAGP), Property is
accountable to the Government, the contractor
has user responsibilities.
“Property not recorded in NASA property systems
must be managed in accordance with the
requirements of the clause at FAR 52.245–1, as
incorporated in this contract.”
Property Management Systems
Analysis (PMSA)
Systemic process to assess the effectiveness of
the contractor’s PMS. The PA will review the
Property Plan, PMS, use random sampling and
interviews to access all applicable property
process outcomes and functions.
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
My 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.
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
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 the risk of loss or repeated
loss, mission or schedule delays, safety to
personnel or public, or increased cost require
immediate correction.
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
assess adequacy.
Self Audits
• Self Audits- encourages contractors to find and correct
deficiencies or identify best practices, before the PMSA.
• FAR 52.245-1(b)(4) 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.
Property Management Plan
• The PA must review the Property Plan to make
sure it covers all areas of Property Management
and meets contractual requirements, as well as
other specifications as referenced in the
contract.
• The contractor’s plan should be detailed and
comprehensive. Where non-specified
percentages, tolerances, timeframes, etc. are left
to PA judgement versus contractors
specification.
Functional Areas/
Process Outcomes
Property Management includes:
• Overall Property Management System
effectiveness
• Policy
• Procedures
• Self Audits
• Property Processes outlined in FAR
52.245-1
FAR 52.245-1(b)(1-4), ASTM Standards: E2279-03, E2135-06,
E2452-05e1, and E2379-04
Review of 10 Property Outcomes:
1. Acquisition
2. Receiving
Identification
7. Relief of
Stewardship
Responsibilities
Disposal
3. Records
8. Utilization
4. Physical Inventory
Consumption
Movement
5. Subcontractor
Storage
Control
9. Maintenance
6. Reporting
10. Property Closeout
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 52.245-1(f)(1)(i), NFS 1852.245-70 Contractor Requests for Government Provided
Equipment, NFS 1852.245-74 Identification & Marking, ASTM E2453 and E249507
NFS 1852.245-70
NFS 1852.245-70 (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)
Receiving of Government Property
• Property received inspected for discrepancies
• Discrepancies segregated, documented and
investigated (i.e. partial shipments,
shortages/overages).
• Carrier signatures obtained
• Items reconciled against PO
• Detailed receiving report prepared, distributed to
appropriate offices
FAR 52.245-1(f)(1)(ii)
NASA Onsite Receiving
• NFS 1852.245-71 requires prior notification to
NASA Center Central Receiving for any incoming
vendor deliveries.
• Prior to Jan 2011 clause required transfer within 5
days of receipt of property onsite.
• Post Jan 2011 MSFC requires transfer within 15
days for equipment, and 30 days for materials.
Records of Government Property
• Basic information as required by FAR
52.245-1
• Source documentation or references
retained (i.e. purchase
documents/receiving reports, transfer
documents)
• Records are accurate and up to date
FAR 52.245-1(f)(1)(iii), NFS 1852.245-74, NFS 1852.245-79 Records and
Disposition Reports for Government Property with Potential Historic or
Significant Real Value, Standard: ISO VCS 15489, 2001
FAR Elements of Property Record
FAR 52.245-1(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).
NFS 1852.245-74 Identification and
Marking of Government Property
NFS 1852.245-74 – 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.
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 52.245-1( f)(iv), NFS 1852.245-78 Physical Inventory of Capital Personal
Property, ASTM E2132-01 & E2221-02
Physical Inventory Considerations
FAR Requirement: FAR 52.245-1(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.
• 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 1852.245-78 require annual
inventory of Capitalized assets to be submitted. Method
of inventory can be determined by the contractor.
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 52.245-1 (b)(3) and (f)(1)(v)
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
Reports
• Discrepancy reports
• Loss, Damage, Theft or Destruction reported
promptly
• Physical inventories reports are completed
• Excess or 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 1852.245-73 Financial Reporting of NASA
Property in the Custody of Contractors (NF 1018)
FAR 52.245-1(f)(1)(ii)(A), (f)(1)(vi), and (f)(1)(iv).
1018 Reporting
• Non-CHATS reporting contractors reports are due
by 10/15 for period ending 9/30.
• CHATS reporting contractors were 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 or foot noted and the contractor
should explain what happened and what is being
done to prevent future adjustments.
PA Validation & Review of Reports
• NF 1018: PA should understand where the contractor is
obtaining information for the report.
• Loss reports require assessment of completeness of the
report, determination of Contractor’s managerial
personnel involvement, assessment 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)
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
• Proceeds credited or submitted as directed
FAR 52.245-1(f)(vii), (h),(j) & (k)
Evaluation of Relief of Stewardship
• The contractor is required to keep records which
document relief of stewardship
• Transfers need to be complete with all required
signatures (the initiator of the form has the
responsibility to obtain final report with all
signatures)
• Pick up or final plant clearance cases should be
documented and processed in a timely manner.
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.
(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 52.245-1(f)(viI)(B)
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 52.245, Alt 1.
• Loss reports must contain all required data – per FAR 52.2451(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 1852.245-72 Liability for GP Furnished for Repair or Other
Services – liable for loss where they have been negligent in
care or diligence in safeguarding
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 (noninterference basis, rental, etc)
• System established to review and identify excess
property (promptly)
FAR 52.245-1(f)(viii)
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 52.245-1(f)(1)(viii)(A), ASTM E2606-08
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 52.245-1(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
cross-referenced documents evidencing receipt, issue, and use of material
that is issued for immediate consumption.
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
Maintenance
• Program established consisting of systematic written
procedures for servicing and inspecting equipment
• Safe, efficient and economical operation of 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/PA approval for major repairs/upgrades
FAR 52.245-1(b), (f)(ix)
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 52.245-1(f)(1)(x)
Conclusion
• Know the contract requirements, 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 versus them.
Questions??
Contact Information:
Tracy A. Helmick, CPPM
NASA MSFC IPO
(256)544-5272
Tracy.A.Helmick@nasa.gov