Back to Basics for
Property Management
and Acquisition
Presenter By:
Beth Green, CPPM, CF
Consultant
Tara S. Miller, PMP, CPPM, CF
Property
Management
Property Management
FAR 52-245-1 (b) Property Management
(April 2012)
(1) 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.
FAR 52-245-1 (f) Contractor plans and
systems (June 2007)
(1) Contractors shall establish and
implement property management
plans, systems and procedures at
the contract, program, site or
entity level to enable the following
outcomes:
• Outcomes
Acquisition
Receipt (Identification)
Records
Physical Inventory
Subcontract Control
Reports
Relief of Stewardship
Utilizing (Use, Consume, Move, and Store)
Maintenance
Property Closeout
Property Management Plan
• Besides the 10 outcomes we just
talked about there are requirements
addressed in FAR Clause 52.245-1
Source documents
Procedures
Self-assessment
Reference documents
• Benefits that can be gained from an
Effective Property Management
System
 Provides an effective management
tool
 Maximizes return on investment
 Ensures effective stewardship
 Facilitates compliance
 Increases reutilization
 Increased cooperation
 and collaboration
Property Management Plan
• What is a Property Management Plan?
 A calculated look at how best to
manage the government’s property
based on the best value for the:
 Program
 Site (Location)
 Entity (Group) level
• What Should the plan provide?
 Performance outcomes (Acquisition
thru Contract Closeout)
 Using primarily VCS and/or ILPs
Property Management Plan
•The property plan should
address four major topics
besides the outcomes should be
rather simple in nature (don’t
complicate things):
 An Introduction
 The Scope
 The Purpose and
 Process Ownership
Property Management Plan
• Developing the Property Plan
 Preparing your procedures (different
than a plan)
 Assess the 10 Outcomes and how the
standards may assist
 Tackling the added requirements
outlined in the property clause 52.245-1
• E2279-03 Establishing the Guiding Principles
of Property Management
• E2135-01 Terminology for Property and
Asset Management
Procedures
•Yes procedures are part of the plan
•They should address policies on how
you are going to manage the
Government property in your
possession. (not necessarily desk top
guides)
•When developing your procedures
 The FAR guiding principles
 The meaning of accountability, and
 Applying the word stewardship
Property Management Plan
•Compliance with
 Regulations
 Requirements of the
Contract
 Policies (Government and
Company)
 Procedures (Property)
 Operational guidelines
(Safety and Environmental)
FAR 52-245-1 (b) Property
Management (April 2012)
(1) (continued) The Contractor shall
disclose any significant changes to
its property management system
to the Property Administrator
prior to implementation of the
changes.
FAR 52-245-1 (b) Property Management
(April 2012)
(1) (continued) 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
performance of this contract (except
where inconsistent with law or regulation).
Voluntary Consensus
Standards (VCS)
• National Technology Transfer and
Advancement Act of 1995 Gives the
meaning of VCS.
• Means common and repeated use of
rules, conditions, guidelines or
characteristics for products, or related
processes and production methods and
related management systems.
• VCS is developed or adopted by
domestic and international voluntary
consensus standard making bodies
ASTM International
• ASTM International
• E53 Committee
 Summary of Active
Standards
Industry Leading Practices (ILP)
•Based on empirical (repeatable)
research, evidence and literature
pertaining to that business practice.
In order for the process to become an
ILP, it should be widely used.
•Generally, there should be supporting
historical data from an accepted
source, e.g., trade publications,
literature, etc. to support the process
as being repeatable, efficient,
measurable, and verifiable.
Property Management
FAR 52-245-1 (b) Property Management
(April 2012)
(2) The Contractor’s responsibility extends
from the initial acquisition and receipt of
property, through stewardship, custody, and
use until formally relieved of responsibility
by authorized means, including delivery,
consumption, expending, sale (as surplus
property) or other disposition, or via a
completed investigation, evaluation, and
final determination for lost property.
Property Management
• Ownership, Accountability, and
Responsibility
 “Ownership” is having legal or rightful
title to property.
 “Accountability” (that is, to be
accountable) means to possess and have
use of the property of another with
delegated duties and responsibilities,
subject to penalty in case of default.
 “Responsibility” (that is, to be
responsible) means to be answerable for
a trust or obligation.
Property Management
FAR 52.245-1 (b) Property
Management (April 2012)
(3) The contractor shall include
the requirements of this clause
in all subcontracts under which
Government property is
acquired or furnished for
subcontract performance.
Property Management
FAR 52.245-1 (b) Property Management
(April 2012)
(4) The Contractor shall establish and
maintain procedures necessary to assess
its property management system
effectiveness and shall perform periodic
internal reviews and surveillances, self
assessments, or audits. Significant
findings and/or results of such reviews
and audits pertaining to Government
property shall be made available to the
Property Administrator.
Acquisition
of
Property
Acquisition
FAR 52.245-1 (a) Definitions (June 2007)
As used in this clause—
“Unit acquisition cost” means—
(1) For Government-furnished property,
the dollar value assigned by the
Government and identified in the
contract; and
(2) For contractor-acquired property, the
cost derived from the contractor’s records
that reflect consistently applied generally
accepted accounting principles.
Acquisition
FAR 52-245-1 (f) (1) Contractor
Plans and Systems (August
2010)
(i) Acquisition of property. The
Contractor shall document
that all property was acquired
consistent with its
engineering, production
planning, and property control
operations.
Acquisition
• Acquisition of Government Property
 Shall be documented
 In accordance with contract
requirements
 Approval process
E2495-13 Standard Practice for
Prioritizing Asset Resources for
Acquisition, Utilization, and
Disposition
Acquisition
• Acquisition of Property (Outcome #1)
• Acquiring (to get or to gain)
• Acquisition begins when needs have
been defined.
• Reutilization
 Acquiring excess, surplus or on-hand
assets that are idle
 The preferred method of acquisition
and supply for any organization and
is considered by the federal
government to always be the first
source of supply
Acquisition
• Acquisition of Property (Outcome #1)
(continued)
 Purchase (new or used)
 The acquiring of property or services
by contract with appropriated funds
through purchase or lease, whether
the property or services are already
in existence or must be created,
developed, demonstrated, and
evaluated
 The approval process begins with
obtaining approval to spend
budgeted organization funds
Acquisition
• Acquisition of Property (Outcome #1)
(continued)
 Lease/Rent
 Fabricate (to make or build in-house)
 The most important considerations for inhouse fabrication are the capacity and
expertise of organization staff and the
facilities and tools required
 Loans
 Attempt to establish formal loan
agreements
 Transfer
 From another contractor approved by the
Government
Acquisition
FAR 45.101 Definitions (June 2007)
• “Material” means property that
may be consumed or expended
during the performance of a
contract, component parts of a
higher assembly, or items that lose
their individual identity through
incorporation into an end-item.
Material does not include
equipment, special tooling, and
special test equipment or real
property.
Acquisition
FAR 52.245-1 (a) Definitions (August 2010)
• Equipment – Means a tangible item that
is functionally complete for its intended
purpose, durable, nonexpendable, and
needed for the performance of a
contract. Equipment is not intended for
sale, and does not ordinarily lose its
identity or become a component part of
another article when put into use.
Equipment does not include material,
real property, special test equipment or
special tooling.
Acquisition
ASTM Standard E-2135
Provides a Definition (higher level)
Equipment is non-expendable,
tangible moveable property
needed for the
performance of a task
or useful in effecting
an obligation
Acquisition
FAR 45.301 Definitions
Agency Peculiar Property:
• Means Government-owned personal
property that is peculiar to the mission
of one agency (e.g., military or space
property). It excludes Government
material, special test equipment, special
tooling, and facilities.
FAR 45.310 (b) Providing agency-peculiar
property
• Direction to the Government
New FAR – does not discuss APP
Acquisition
FAR 2.101 Definitions (June 2007)
Special Test Equipment
• Either single or multipurpose integrated
test units engineered, designed,
fabricated, or modified to accomplish
special purpose testing in performing a
contract. It consists of items or assemblies
of equipment including foundations and
similar improvements necessary for
installing special test equipment, and
standard or general purpose items
Acquisition
FAR 2.101 Definitions (June 2007)
Special Test Equipment (continued)
• or components that are interconnected
and interdependent so as to become a
new functional entity for special testing
purposes. Special test equipment does not
include material, special tooling, real
property, and equipment items used for
general testing purposes or property that
with relatively minor expense can be
made suitable for general purpose use.
Acquisition
FAR 2.101 Definitions (August 2010)
Special Tooling
• means jigs, dies, fixtures, molds, patterns, taps,
gauges, and all components of these items
including foundations and similar improvements
necessary for installing special tooling
equipment, and which are of such a specialized
nature that without substantial modification or
alteration their use is limited to the development
or production of particular supplies or parts
thereof or to the performance of particular
services. Special tooling does not include
material, special test equipment, real property,
equipment, machine tools, or similar capital
items.
Conclusion
• Our goal was to provide a basic understanding
of Government Property Management and the
requirements for establishing a Property
Management System and Plan.
• We also presented one of the first steps in
having Government Property – Acquisition. We
reviewed the different types of Acquisition and
what is necessary to pass the Acquisition
Outcome in an audit.
Rosanne “Beth” Green, CPPM, CF
bethivangreen@cfl.rr.com
Tara S. Miller, PMP, CPPM, CF
tara.s.miller@nasa.gov