2013 NPMA Fall Conference Value Through Professional Asset Management You’re Having a Property...

2013 NPMA Fall ConferenceValue Through Professional Asset Management

You’re Having a Property Management System Analysis

(PMSA)…Now What???

Terri L. Snook, CPPM CF

November 13, 2013


About Me 34 Years in Property Management

Hughes Aircraft CompanyNorthrop GrummanRaytheonBoeing

19 years – Internal Audit and Subcontractor SurveillanceSelf-Governance

Retired in Jan 2012


So…..You get a notification from your Internal (Self-

Assessment) or External (GPA) Auditor that you are scheduled

for a PMSA.

What do you do???


Oh No!!!

AAAAAGG

HH!

HELP!!!


NO!!!Don’t Panic…

It’s not as big a deal as you think it is.


IF……….. You’ve been managing your data You’ve been working closely with your TEAM

Property Management Contracts Program Office Procurement Subcontract Control/Subcontractors Shipping/Receiving Warehouse Custodians/Users Your Customer – ongoing communication…Know your auditor and what is

expected!


FAR 52.245-1 requires that the Contractor has in place a process to assess it’s Property Management System via review, audit, or self-assessment.

The Contractor must also make it’s premises available to the Government for the purpose of review, inspection and evaluation of the Property Management System.


You must determine risks and prepare for a positive outcome

You must collaborate with other departments and help them understand the risks, values and importance of the analysis to the company. This should be ongoing throughout contract performance.

A negative outcome can be very costly!


What does the auditor look at?

What does the auditor look for?


Ten Lifecycle Outcomes/ProcessesAnalyses should be based on the contract and the 10

primary outcomes, as set forth in FAR 52.245.11. Acquisition2. Receipt 3. Records 4. Physical Inventory5. Subcontractor Control6. Reports 7. Relief of Stewardship Responsibility8. Utilizing9. Maintenance10. Property Closeout


Additional ProcessesAdditional processes are embedded within the Ten (10) Primary Outcomes Property Management Identification Movement Storage Consumption Disposition


OLD FAR NEW FAR

FUNCTIONS OUTCOMES OUTCOMES/FUNCTIONS

1 *Property Management 1 Acquisition 1 Acquisition

2 Acquisition 2 Receipt 2 Receipt

3 Receiving 3 Records Identification

4 Identification 4 Physical Inventory 3 Records

5 Records 5 Subcontractor Control 4 Physical Inventory

6 Movement 6 Reports 5 Subcontractor Control

7 Storage 7 **Relief of Stewardship 6 Reports

8 Physical Inventory 8 Utilization 7 **Relief of Stewardship

9 Reports 9 Maintenance 8 Utilization

10 Consumption 10 Property Closeout Movement

11 Utilization Storage

12 Maintenance Consumption

13 Subcontractor Control 9 Maintenance

14 Disposition 10 Property Closeout

15 Contract Closeout Disposition

*Property Management is reviewed within each Outcome.

**Relief of Stewardship is a new Outcome


So, You’ve been notified of your PMSA date…Where do you start?

Schedule an Entrance Briefing Notify involved organizations/functions

ContractsPrograms OfficesProcurementSubcontractsCustodiansAnyone else pertinent to the audit

It’s VITAL that all organizations and functions remain involved every step of the way….in addition to maintaining a continuous relationship at all times! Ensure that all organization are present at the Entrance Briefing.


Entrance Briefing – ALWAYS! Include ALL Affected Organizations Be Clear of ALL Ground Rules with the Customer Determine

Outcomes to Be ReviewedSample Population

CriteriaData Required

Understand ALL requirements BEFORE you leave the meeting


What’s Next?

Gather DocumentationCurrent Government Property Policies/ProceduresCompany’s Property PlanContract SOW (If contract specific)Last Inventory/Reconciliation


Now let’s look at the specifics of each of the 10 Outcomes and see what will be reviewed and what you will need to ensure SUCCESS!


Outcome 1: Acquisition Contractual Authorization

Statement of Work CLIN (Line Item in the Contract) Bill of Material (BOM) Contract Modification

Procurement Documentation (Reasonable, Allocable, and Allowable) Purchase Orders (CAP) DD1149’s/DD1348’s, etc. (GFP)

Transferred Shipped/Delivered in Place Provided by Customer

In-house Fabrication Documents

Population is generally those items acquired during the past year.


Receiving Documentation Purchase Orders Packing Slips DD1149’s/DD1348’s Fabrication Orders

Items verified/Counted Discrepancies documented/reported/Isolated Receipt documented Proper distribution is completed

Outcome 2: Receipt

Population is generally those items received during the past year.


Outcome 3: Records Minimal Information FAR paragraph (f)(1)(iii)(A)(1) through (10)

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.

Quantity received (or fabricated), issued, and balance-on-hand. Unit acquisition cost. Unique-item identifier or equivalent (if available and necessary for individual item

tracking). Unit of measure. Accountable contract number or equivalent code designation. Location. Disposition. Posting reference and date of transaction. Date placed in service (if required in accordance with the terms and conditions of the

contract).

Property records shall enable a complete, current, auditable record of all transactions


Outcome 4: Physical Inventory Ensure Inventories are performed in accordance with timeframe established

in the Property Procedures Timely Reconciliation Inventory Reports/Results to Customer

Quantity ID/Stock Number (if applicable) Description IUID (if applicable) Model Number Serial Number Location Utilization Inventory Date


Outcome 5: Subcontractor Control Clearly identify items provided Flow down of contract terms and conditions (e.g., extent

of liability for loss of Government property) Subcontracts are properly administered Periodic reviews to determine the adequacy of the

subcontractor's property management system Subcontractor Control Records must be maintained in

accordance with Terms and Conditions contained in the Subcontract


Outcome 6: Reports Required Reports

DiscrepanciesPhysical Inventory ResultsLoss, Damage, Destruction, and TheftCorrective ActionsAudits/Self AssessmentsExcess PropertyAny Reports requested by the Contracting Officer


Outcome 7: Relief of Stewardship

Report All Losses, Damage, Destruction and Theft Ensure a thorough investigation is conducted Ensure Report is complete Ensure Record is adjusted immediately after receiving

relief of liability


Outcome 7: Relief (Cont.) Report Includes

Date of incident (if known) The data elements required under paragraph (f)(1)(iii)(A) of this clause Quantity Accountable contract number A statement indicating current or future need Unit acquisition cost, or if applicable, estimated sales proceeds, estimated repair or

replacement costs All known interests in commingled material of which includes Government material Cause and corrective action taken or to be taken to prevent recurrence 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 Copies of all supporting documentation Last know location 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


Outcome 8: Utilization

Provide documentation to show that Property is utilized, stored, and moved only as authorized in the contractUtilization screeningRent-free use

Documentation reflecting that all excess property is reported to the customer


Outcome 9: Maintenance Maintenance Program

CalibrationPreventative MaintenanceRoutine RepairEmergency RepairReport to Customer

Capital type rehabilitation Replacement

Property is marked with Last Performed and Next due dates


Outcome 10: Property Closeout Closeout Documentation

LDDT Cases Investigate Report Secure closure

Physical Inventory Reconciliation

Disposal of all Property upon receipt of instructions Excess Transfer to Follow-on Contract


Exit Briefing

Include ALL Organizations involved in the PMSAReview and understand each

finding/observation BEFORE you leave the meeting

Agree on timeframe/submittal of Corrective Action Plan (CAP)


Corrective Action Understand what needs to be done

Determine the causeLook at long term/permanent fixDon’t bandaid the errorUpdate Procedures, if necessary

Develop a Milestone plan Complete all actions on time

Do what you Say You’re Going to Do!


General Rules of Thumb… Establish all ground rules at the Entrance Briefing Be Prepared Don’t volunteer information NOT asked for Provide documentation in a timely manner

This can vary with each auditor, and should be determined in the entrance briefing.

Provide complete Corrective Action Plan in a timely manner Complete actions ON TIME Be COURTEOUS Be PROFESSIONAL Be HONEST!!!


The ???

Ensure that your Property Management TEAM includes all the other organizations…

*Maintain continuous and open communication…

*Maintain accurate and complete records of all actions

*Know your Customer and what’s expected…

SUCCESS!


Questions???Contact:

Terri Snook, CPPM CF

310-910-4925

[email protected]

Thank you for your time!

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