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I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Headquarters U.S. Air Force
Government Furnished Equipment Accountability
Mr. Colquitt “Quitty” LawrenceAF/A4LM
2 February 2011
I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Overview
AFAA Audit Report
Rapid Improvement Event
Game Plan
Data Call/Challenges
Contracts vs Contract Property Management System (CPMS)
Summary
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I n t e g r i t y - S e r v i c e - E x c e l l e n c e
AFAA Audit Report
AFAA report highlighted the AF did not properly account for and report GFE in AFEMS
AF imposed financial reporting of GFE onto contractors and transferred fiduciary responsibility away from the AF
Air Force lost accountability of GFE in excess of $22 billion (acquisition value), was unable to determine how much was financially reportable, and is at great risk for fraudulent activity
GFE recognized as Material Weakness at June ESC meeting
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I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Headquarters U.S. Air Force
Rapid Improvement Event
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I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Bottom Line
IF:
1. Policy is clear and aligned
2. Roles and responsibilities are clear and understood
3. Procedures are clear and documented so that people know how to execute their roles and responsibilities
4. Policy and procedures are strictly followed
5. Oversight ensures compliance
THEN:
100% of GFE will be recorded in AFEMS
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I n t e g r i t y - S e r v i c e - E x c e l l e n c e 6
RIE Objectives
1. Respond to ESC: Plan to ensure GFE situation does not happen again
2. OUTPUT : Clarify Current Condition:
o Problem/Scopeo Definitionso Organizational roles and responsibilitieso Process and IT
Root Cause:o What caused the problem to begin with?
Action Plan(s):o What needs to be done – and how it addresses the problemo Who will do it (OPR/OCR)o When it will be done
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Participating Team Members
Almost 40Participants
I n t e g r i t y - S e r v i c e - E x c e l l e n c e
RIE Approach and Outcome
Inputs:
Team Member Briefings
Audit Findings ESC Guidance OSD GFE Process
Flow
Processes:
Clarified the Problem Scoped the Effort Established Desired
Future State Reviewed Current
State Identified Key
Problem Areas Performed Root
Cause Analysis Created Action Items Planned Way Ahead
Outputs:
Key Findings Recommendations Way Ahead Plan
(Documented in A3)
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I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Scope
Government-Furnishing Equipment (GFE) only: Equipment going to/from contractors Equipment coming out of Contractor Acquired Property
(CAP) that is titled to and accepted by the government
Scope does NOT include: Government-Furnished Material (GFM) Contractor Acquired Property (CAP)
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I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Applied A3 Model(Work-In-Progress)
8-Step Problem Solving Process
Step 1: Problem Statement
Step 2: Break Down the Problem/Identify Performance Gaps
Step 3: Set Improvement Targets
Step 4: Determine Root Cause
Step 5: Develop Countermeasures
Step 6: See Countermeasures Through
Step 7: Confirm Results and Process
Step 8: Standardize Successful Processes
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I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Step 1: Clarify &Validate the Problem
Problem Statement:
“The Air Force is not properly accounting for GFE in the Air Force Equipment Management System (AFEMS)”
Additional References:
o AFAA report published 11 Jan 2010 noted that “the Air Force lost fiscal accountability of GFE in excess of $22 billion” and “did not take effective actions to improve GFE financial reporting.”
o Executive Steering Committee (ESC) provided guidance to address issue at June 2010 meeting
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I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Step 2: Breakdown the Problem and Identify Performance Gaps
Examples:
Policy does not provide clear directions of expectations
Multiple organizations and players are involved in ensuring GFE properly accounted for in AFEMS – who is responsible for what is not clear
There is no consistent set of procedures for responsible parties to follow, and there are multiple data systems are involved in GFE tracking using different data elements
No established consistent means for ensuring actions are being taken and there is a lack of understanding among the players
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I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Step 3: Set Improvement Targets
Desired Future State:
“All GFE recorded in AFEMS”
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I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Step 4: Determine Root Cause
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All GFE is not properly accounted for in AFEMS
Policy (1)
Roles &Responsibilities (2)
Compliance (4)Awareness (5)
Procedures (3)Information & Data (3)
Gaps
Inconsistent
Unclear
Lots of Handoffs
Many Players Unclear Responsibilities
Lack of Internal Controls
Training
Cumbersome Procedures
Of Policy
Of Impact
Of Roles
Cumbersome
Unclear
Non Standard
Undocumented
Non Standard
IT Overlays
Drops at Handoffs
5-Whys / Root Cause Analysis: Summarized Fishbone Diagram
I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Step 5: Develop Countermeasures
Needs to be an AQ/A4/7 joint solution
Need to ensure policy is in alignment (DoD AF MAJCOM)
Need to ensure roles and responsibilities are clearly defined
Need to ensure procedures are consistent across organizations
Need to ensure appropriate representation for Business Case Analysis (BCA) Identify team members (Acquisition, Contracting, Logistics,
Legal, ...) Create checklist for required actions Establish action plan for providing GFE
Establish Accountability Property Office (APO)
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I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Step 5: Develop Countermeasures
DEC10 ESC review and vector check – Seek directional approval
DEC10 Wrap-up bulk of ‘Discovery’ related Action Items
JAN11 Release Joint memo (AQ & A4L) tasking to identify GFE on Command and base contracts.
FEB11 Schedule follow-up session with GFE working group to drive through new discovery and develop greater detail to corrective action plan
APR11 Publish Guidance Memorandum(s)
Countermeasures:
Established bi-weekly GFE meeting to manage and drive progress
Periodically update senior leadership through A&FM IPT and Executive Steering Committee
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I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Step 6: Seek Countermeasures Through
GFE Accountability Effort:
Senior Officials: Mr Durante (SAF/AQX) / Mr. Allen (AF/A4L)
Co-Leads: Maj Hicks / Mr. Lawrence
Working Group: Participating Team Members
Advisors: OSD AT&L, DCMA, AFAA/FSF
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I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Headquarters U.S. Air Force
Game Plan
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I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Game Plan
Address the $22B (SAF/FMPR/A4LM/754 ELSG) – ECD: Mar 11 OPR: A4LM Review contracts that accounted for 95% of GFE balance Validate GFE on contracts Populate AFEMS for missing GFE Provide update to A&FM IPT – 17 Feb 11
Obtain and populate AFEMS with GFE information - ECD: Dec 11 (SAF/AQXA/A4LM/A4LE//754 ELSG All contracts with GFE Validate information
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Game Plan (cont’d)
Establish future processes to account for GFE – ECD: Sep 11
(SAF/AQXA/AQCI/A4LM/A4LE) Develop Policy and Procedures – Nov 10 – Jun 11 Final coordination – Jul 11 Publish Policy and Procedures – Aug 11
Revise responses to AFAA audit – A4LM/A4LE Coordinate with AFAA ECD: Feb 11
Establish Air Force Property Office – Initiate Study – Mar 11 Single POC for Government Furnished Property Established in Navy (Central Property Office)
Provide updates to A&FM IPT monthly and ESC quarterly
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I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Data Call
Data Call sent 5 January to Program Offices Requested GFE on all contracts Suspense of 10 Jan; still receiving additional/revised
responses Reviewed over 120 contracts and over 53K records Working through submissions
Review Process Validating each GFE line on contract Comparing CPMS data Verifying GFE is in Air Force Equipment Management System
(AFEMS)
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I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Challenges
Program Offices and contractors understanding of tasker Contractors’ data consolidated under GFP
Equipment Aircraft Spare parts
Tagging/listing spare parts as equipment
Data issues Reliance on contractors to provide data Incomplete data (e.g. DODAAC, SN/PN, Serial Number) Data structure (e.g. contract numbers) must modified for
matching purposes
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I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Contracts vs CPMS to Address $22B (cont’d)
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WeaponSystem
CPMS(AFAA source)
GFE Data Call – All Equipment
GFE Data Call – Capital Equipment
Recorded in AFEMS
C-17 $ 2,947.8M $ *3,448.3M
$ 182.0M $ TBD
B-2 2,835.7M *1,328.7M 509.7M 29.0M
LGM-30 1,346.2M 120.6M 80.6M
F-15 1,098.9M 413.7M 349.3M
C-135 987.6M 2.6M .6M
KC-135 933.1M 8.0M .8M
E-3 597.5M .7M .3M
B-1 587.6M 124.6M 91.1M
C-130J 562.0M .8M .1M
F-16 486.0M .0M .0M* Response includes aircraft, heavily skewing numbers
I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Summary
Aggressively working the $22B disconnect
Game Plan in place with POCs and milestones
Validating data time consuming
Keep leadership informed through A&FM IPT and ESC
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