Business system rule – why is contract management and property management important to each other?

In this blog, we have been sharing our views on why government contracts managers need to work with property managers. Alex Barenblitt has written a few blogs about it, and he is hosting a Webinar on Oct. 10  to further expand on this topic.

Coincidentally, the timeliness of this discussion was affirmed by many professionals in the areas of contracts management and property management. Last week, I attended a joint lunch hosted by the local chapters of the NPMA (National Property Management Association) and NCMA (National Contract Management Association) in the Baltimore area. Guess what? The topic for the lunch discussion was:  “Why contract management and property management are important to each other?”

The lunch speaker was the President of the National Contract Management Association (www.ncmahq.org) Marcia Whitson. Marcia, with her practitioner’s wisdom and disarming personality, offered her observations on why contract management should study the requirements for government property management. My key takeaways from the lunch discussion:

  1. FAR/DFARs requirements on contractors’ business systems have multiple components, including Accounting, Material Management, and Property Management, and more. These are interdependent, and shouldn’t be separated. The people in these areas should talk to each other. The systems should also connect to each other.
  2. Contracts managers must make sure the company has existing business processes and systems in place to be compliant to the requirements around Government Property Management. Otherwise, there will be incremental costs to the contracts and the costs must be estimated with the help of property managers.
  3. There are penalties for not following the property management requirements stipulated in the contracts. The Property Administrators (PO) will conduct contractor assessments, which seem to be more and more frequent in the age of Sequestrations. The Contractor Officers (CO) can withhold payment, depending on how serious the violations are and how the contractors are taking the steps to address their concerns.

Marcia emphasized how important it is to make sure the company’s policies and procedures (SOP) are actually implemented. Often, there are gaps between the SOPs and the actual practices. When the Property Administrators conducts audits or assessment, they are going to use the SOP as the guidelines. So it’s wise for the staff members who write SOPs actually go to the field offices to observe how they are implemented.  You don’t want to find out from the Property Administrators. It will be too late.

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