Awarded first prime contract with government property, now what?
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If you’re reading this, it is very likely that your organization has happily grown over last few years supporting service-based government contracts or was a subcontractor that never had to worry about managing government property inventory. Quality past performance has earned your group a great reputation, which in turn has positioned the company as the likely prime on a significant contract. But there is a catch, the new contract is loaded with FAR (Federal Acquisition Regulation) and DFARS (Defense Federal Acquisition Regulation Supplement) clauses that the team has never had to comply with. Web searches indicate someone in the company is now going to wear a “government property manager hat”.
We frequently encounter contractors new to government property management. Often many organizations wait until their awarded the contract to begin addressing these requirements. Even worse, we get anxious calls from companies that have upcoming Property Management System Analysis (PMSA) scheduled or have already been found deficient. While we take pride in our ability to help contractors get out of hot water, there are several things companies can do to be prepared for these new responsibilities.
Identify and read the government property clauses in the contract: While FAR 52.245-1 is the most common government property related clause, there are several others that will help the compliance team understand what will be expected of them. Other relevant FAR clauses are 52.251-1 and 52.245-9. If it is a Defense contract you may see DFARS clauses 252.211-7007, 252.245-7001, 252.245-7002, 252.245-7003, 252.245-7004, 252.223-7002, 252.223-7007, and 252.228-7001. Be advised, if you have DFARS clause 252.211-7007 then expect to receive government furnished property that must be reported to the IUID registry. This can be a difficult requirement to manage without an appropriate system.
Immediately develop the organizations official Government Property Plan: The number one reason contractors new to government property are found deficient is because their written policy and procedures are found inadequate. Make sure you get this right, its actually easier than you think. Review paragraph (f) of the FAR 52.245-1, it lists the ten outcomes your property plan must address. Web searches for “government property plan” will yield some document templates that will likely be useful. Expect to receive a request to see this document soon after award from the Property Administrator (PA).
Understand your customers property risk management process: Contractors new to government property are by default assigned a “Moderate Risk” rating, this means the PA will complete a PMSA at least once every 2 years. Plan on it occurring sooner rather than later, and don’t get caught flat-footed. Follow this link to read the Contract Property Administration Guidebook published by the Defense Acquisition University (DAU). This guide details the PA’s approach to conducting PMSA’s and risk assessment. Give the PA every reason to identify your company as “Low Risk”.
Get the right tools: Managing government property is complicated. While using spreadsheets may be sufficient for a handful of assets, trying to manage 100’s or 1000’s of assets in Excel or a basic database very often leads to the organization getting issued a Corrective Action Request (CAR). This can escalate to having the property system disapproved and 5% of progress payments withheld. It is as catastrophic as it sounds. Avoiding this is much more cost effective and far less stressful. There is no need to re-invent the wheel, look for software that supports FAR/DFARS requirements off-the-shelf. Click here to learn more about eQuip! government property management system.
Train your property professional: While Google can be very helpful tool for improving property management knowledge, the best source is the participants of the National Property Management Association (NPMA). NPMA has local chapters across the world that get together monthly, and they also host national quarterly and annual education seminars. Joining the NPMA provides access to veteran property professionals that will help you avoid costly mistakes and adopt best practices that will improve the company’s bottom line.