Finally, it is time to tighten up the Government Property Management system

Government Property and DOD's clean audit goal

Managing Government Property efficiently will support DOD’s clean audit goal

 

Recently, we have seen headlines about the deficiency in Government Property Management system in contractor organizations. In our view, it’s long overdue, and we are glad to see that this system is getting some well-deserved attention.

Government contractors need to make sure they have adequate business systems. The Department of Defense has proposed regulations that will allow it to withhold payments from contractors who have inadequate business systems: purchasing, accounting, estimating, MMAS, EVMS, and Government Property. In the past few years, we have seen a lot of DCMA activities focusing on the cost and accounting related business systems. The Government Property Management system has often been on the back burner. But it shouldn’t be. If DOD wants to meet is goal of clean audit by 2017, it should start paying attention to the Government Property Management system, because clean audit can’t be obtained if the DOD agencies and their contractors can’t track and manage Government Property efficiently.

 

Some examples of the increasing attention:

  1. Pentagon Holds Back Contractor Funds on Business Systems”:  DCMA cited failure in business systems in big DOD contractors, like BAE, Northrop Grumman, Boeing, Honeywell, General Atomics. Partial payment will be withheld.
  2. Earlier last year, DCMA withheld partial payment to a unit of Lockheed Martin, and later released the payment after the company made resolved issues.
  3. In January, the executive director of NCMA (National Contract Management Association), an organization with many government contractor members, raised the alarm about the neglect on the Government Property Management profession.

Contractors shouldn’t ignore the Government Property Management system anymore. We have seen some contractors invest in accounting systems, cost systems, capture systems but not in Government Property Management system. They still use excel sheets to track Government Property.

Government Property Management system is an integral part of the overall business systems. The data should flow among different systems seamlessly. The business processes among different systems should be connected and streamlined.

 

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