Why Should Contract Managers Care about Government Property Management?

This blog posted is contributed by Alex Barenblitt, CPPM, MBA. Alex leads the consulting practice for E-ISG Asset Intelligence on Government Property Management Business Processes

Within a government contractor organization, should there be a strong connection between the function of contract management and government property management?  Yes, there should be.

At first glance, many unfamiliar with what the government property management staff really does may not see the interdependence between these two functions.  But in fact, the connection between the property management function and the contract management function needs to be very strong.  Government property management is far more than just inventory management. It should be part of contract management.

The property management function needs to be an integrated part of the contract management lifecycle, including the RFP stage and throughout the implementation phase. The property management staff needs to interpret the Property Management regulations in the FAR and other FAR supplements (like the DFARS) to the contract managers, so everyone is clear on the operational and cost implications from regulations referenced in a particular contract.  The specific regulations called out in the contract could have a significant impact on the cost of administering the Contract.  If these particular contract requirements are specified and accepted, the contractor must meet the requirements, regardless of the cost.  So it’s vital for the property management function to be working aside the contract management function before these requirements accepted.

Let me illustrate this with one example. A hot subject these days is the Unique Identification (UID).  The regulations that are currently in effect, assuming they’ve been updated in your DoD contracts, require that all items with an acquisition value of $5,000 or greater must be marked with a UID tag and registered in the DoD UID Registry.  Also, the same regulations require that all items designated “DoD Serially Managed Items” must also be marked and registered.  And beginning January 1, 2014, the $5,000 threshold will be eliminated, so all items which are “DoD Serially Managed”, regardless of the acquisition cost, will have to be marked and registered.

It is important that the contract specifies what items are “DoD Serially Managed”, and it’s the Government Agency’s responsibility to be very explicit about these items. So it’s essential that the property management team and the contract management team work together to make sure it’s clear which items are and which items are not “DoD Serially Managed”.  General phrases such as “miscellaneous equipment”, or “support equipment” are very dangerous to the contractors because it is then up to someone’s interpretation of what items really do need to get marked and registered.  That approach will likely lead to costly disputes, and might result in Corrective Action Requests (CAR) and even partial payment withholding.  This is just one example where the property management function needs to work with the contract management function to review the regulations in the contract in order to manage the cost and risks in accepting the contract.

If you would like to understand more about the specific requirements on UID, please join us in our upcoming webinar.

 

At E-ISG Asset Intelligence, we have a Government Property Management Business Processes Consulting practice, led by Alex Barenblitt. Alex is a certified CPPM and holds an MBA degree. He has many years of experiences in working with government contractors who support Department of Defense and other civilian agencies. Alex and his team can be engaged to provide independent third party assessment, help to respond to the Correct Action Request from government auditors and train the internal staff on policy and procedures.  To inquire more about the consulting services, you can call us at 1-866-845-2416.

 

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