5 Mistakes to Avoid When Managing Government Property
As a government contractor, you’re required by law (specifically by the FAR and DFARS) to track the government property you use, consume, or create. Anything owned or leased by the government counts as government property. Sounds simple on paper, right? But you’d be surprised how complex this can get.
Or maybe you wouldn’t be surprised. Maybe you’ve been pulling your hair out ever since you got that government contract. If that’s the case, you’ll feel better knowing you’re not alone. Government regulations can be very confusing to understand, and even more confusing to act upon.
We’ve put together this short list of common mistakes made when dealing with government property. If any of these sound familiar, be sure to take note of the suggested solutions and preventative actions you can take to get and stay on track. Let’s get started.
1) Forgetting to Track Leased property
Even when the government doesn’t own a piece of equipment or a facility, it may still have title to it. When the government leases something, it is still responsible for the use and care of that property. Because of this, you should still include that property in your audit.
The solution to this is fairly simple. Any assets from the government, leased or owned, should be labeled properly and counted in an audit. Incorporate these into your asset management system (see number 4) to make sure everything goes smoothly.
2) Misplacing Assets
In asset management, we hear about it all of the time: assets disappearing as if they grew legs and walked away. You can imagine how much this can interfere with your work. At best, your employees fumble around trying to find a piece of equipment or tool. At worst, you keep losing important assets and the government slams you with a Corrective Action Request (CAR).
To stop assets from getting lost, schedule audits and asset management training sessions frequently (we recommend having them annually). This way you check on the location of your assets often, and ensure your employees can continue to track the assets in between audits.
3) Using Government Property for Other Contracts
When you get a shiny new toy, it’s tempting to use it whenever you can. However, if that shiny new toy was provided by the government for a specific purpose, it has to be used for that purpose, and ONLY that purpose.
If you or your company are found to have used government property improperly in this way, you can face serious penalties. A mistake like this can happen to anybody. Raytheon, a major government contractor, was charged $18 million by the U.S. Air Force for utilizing government resources on commercial products.
Prevent this by labeling and separating government property from other assets. This way no one will accidentally use government property when they aren’t supposed to. Be sure to explain to employees these rules and why they’re important.
4) Lacking an Adequate Property Management System
If the government revokes system approval, the contractor assumes all risk (Kehoe & Conley, 2016). Translation: if your asset management system isn’t up to snuff, you will be liable for any lost, damaged, or stolen property.
An efficient property management system will allow you or the government to quickly audit assets and identify any problems.
A good system can also prevent CARs, which not only cost time to fix but may damage your business’ reputation. A bad reputation is bad for business; you could lose future contracts with the government or even contracts in the private sector.
5) Not Caring
As a manager, you may understand the consequences for incorrectly managing government property. But do your employees understand? You can do everything right in implementing a property management system, but if its users don’t know its importance they’re not likely to care. Make sure that everyone who interacts with government property cares about managing it properly.
One easy way to get employees to care is simply to explain the importance of government property management. Teach them the basics of what you know about these rules, and give examples of potential consequences if requirements aren’t met.
Another method is to increase employee accountability. Document your employees’ compliance, and share this in employee evaluations or even a public rank board. This will show them how important asset management is to your company, and may even make it fun.
Each mistake we outlined here has a specific fix, but most major mistakes in government property management have a general solution as well; have adequate tools and strong communication. Your asset management tools should have clear data, roles, and reporting so your team can avoid simple mistakes. And your team should regularly talk about regulations and how you can best meet them. Do this, and you’ll be able to face just about any problem.