When It Comes to Improving the Property Management Business Processes, the Federal Government is Leading the Industry
We all observed that the Federal Government is slow in adopting innovative software technologies. Specifically, they tend to shy away from Commercial Off the Shelf Software (COTS). However, when it comes to improving the property management business processes, the Federal Government is playing a leadership role here. The Federal Government requires its contractors to have in place 6 business systems, and they enforce it by auditing these systems. Every government contractor takes these audits seriously because they carry sticks (i.e. withholding payment). When DCMA calls, every contractor listens.
One of the business systems is the Government Property Management system. The requirements in the FAR/DFAR on contractors’ Government Property Management system support the life cycle approach to asset management, and encourages contractors to adopt best practices and deploy the best technologies to support them.
FAR 52.245.1 outlines the 10 outcomes from the Government Property Management system, and these 10 outcomes are based on the life cycle events of assets:
- Acquisition, Receipts, and Record of Property — these happen in the beginning of the life cycle
- Reports, Physical Inventory, Maintenance, Utilizing Government Property — these happen during the use of assets
- Relief of Stewardship, Subcontractor control, Contract close up – these happen during the contract period or at the end of the contract
The FAR/DFAR requirements don’t subscribe the business processes to follow or the technologies. Rather, they provide a framework for contractors to use when improving the Government Property Management business system. This is great leadership.
The Federal Government is ahead of private industries in providing this leadership in asset management. I have yet to see any other industry that is consistently subscribing to this kind of framework for asset management.
The asset management practices in private industries (excluding the government contractor segment) range from paper and pen tracking of assets, excel sheets, to 6 Sigma type of rigorous management of assets. Adopting best practices in asset management is only voluntary. Most companies only do after they experience a severe loss of assets or failure of financial audits.
Learning from the Federal Government, private sectors can benefit from thinking about asset management more strategically.