6 Ways to Help Ensure the Success of your Next Contractor Self-Assessment
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If you’re like me, just hearing the word ‘assessment’ makes you tense up a bit. In fact, writing it is making me tense up, too.
So, now that we’re a bit uncomfortable (at least I am), I’m hoping this blog post can help us relax a bit knowing that contractor self-assessments don’t have to be nerve-wracking.
A contractor self-assessment or CSA is a way to examine the effectiveness of your government property management system. This includes everything from the acquisition/receipt of property through property closeout.
Conducting a contractor self-assessment is critical for complying with government regulations like FAR 52.245-1. It can also help you avoid the penalties associated with noncompliance, like receiving a Corrective Action Request (CAR) during your next DCMA audit. Ultimately, a CSA can expose strengths and weaknesses in your system that, if improved, can result in time and money saved.
Whether you’re a seasoned pro looking to improve your own self-assessment plan or a novice looking to get started, we hope the following 6 tips can help.
1. Find an Executive Sponsor
Government Property Management is one of the six mandatory business systems outlined by the Department of Defense (DoD). For many government contractors, government property also represents a significant investment in terms of dollars. With that said, it’s still rare to find a C-level executive who is tasked with prioritizing property management.
Our advice for property management professionals is to secure an executive sponsor. Find someone at a high level who will support property management initiatives like Contractor Self-Assessments and advocate to help ensure property management receives the attention and investment it deserves.
2. Create, Review, and Revise Your Plan
It may sound simple, but your plan is vital to conducting an effective CSA.
Your plan should include the who, what, where, when, why, and how of your Contractor Self-Assessment.
One major consideration here is to make sure you’ve included metrics for each of the outcomes subject to review as identified by FAR 52.245-1. This will cover everything from acquisition through project closeout, and give you a pretty comprehensive look at your property management program.
Another key consideration here is your methodology. Will you closely follow processes established by a governing body (e.g. DCMA), or will you look to develop your own internal procedures?
Both options have their benefits. One method may already be tested and proven, while developing your own could allow you to combine the requirements of multiple regulations (e.g. FAR, DFAR, OMB, GAAP). For more info on this, check out this great publication by NDIA: Guideline for Contractor Self-Assessment
3. Be Sure to Keep it Objective
A critical component to a successful self-assessment is keeping it objective. Contractors need to apply this in a few different ways.
First, the assessment should be performed by an unbiased source. Options include someone from your own internal audit function, an uninfluenced property professional from another site, a subcontractor, or a third-party independent consultant.
Second, and as a bit of a data junkie I love this one, the assessment should leverage appropriate statistical sampling techniques.
Someone once said to me, “You can get 9/10 dentists to agree to anything. You just have to ask the right 10 dentists.” The same goes for government property management. The property records for 9/10 assets might be perfect. You just have to look at the right 10 assets.
To ensure you’re evaluating a strong representative sample of government property, you’ll want to confirm that your sample size is large enough and that the sample is randomly generated. The DoD Guidebook for Contract Property Administration includes guidelines for three different confidence levels 90%, 95%, and 97%.
4. Watch Out for these Hang Ups
When evaluating your property management program against each of the ten outcomes identified by the FAR, you will likely identify some areas for improvement. There are a few places where it can be easy to get caught up and a few places where implementing best practices can make a big difference.
For example, be sure the property management team is involved in the proposal stage. This will help when it comes to understanding the requirements of the contract and being prepared to meet them upon contract transition.
In addition, some great best practices that can help streamline your property administration efforts include integrating your government property management system with your procurement system. This eliminates double data entry and ensures every entry is being caught. It also establishes a cross-functional contract closeout team to help accelerate the process.
Download this self-certification whitepaper for a larger list of high level best practices and common mistakes.
5. Put a System in Place
According to the FAR, contractors are required to “initiate and maintain the processes, systems, procedures, records, and methodologies necessary for effective and efficient control of Government property.”
A system doesn’t necessarily mean technology, but we’ve seen far too many instances where not having the right system in place has made it much more difficult to conduct (and pass) a Contractor Self-Assessment.
One of the most common occurrences is outgrowing spreadsheets and not realizing it until it’s too late.
Managing 1-200 pieces of government property in a spreadsheet might be doable. But as your business grows, suddenly you’re managing hundreds or thousands of assets with a larger team.
A spreadsheet just isn’t going to cut it.
Implementing an automated system gives you the opportunity to manage government property more effectively and efficiently. Features to look for include (but are not limited to) being able to (1) easily search asset records and history, (2) conduct an onsite, physical inventory with handheld scanners, and (3) automate processes like report creation, IUID registry updates, and DD1149 form generation.
6. Share the Results and Take Action
Lastly, there’s not much value in completing a Contractor Self-Assessment if you don’t have a plan for sharing the results and taking action. Government regulation requires the results be shared not only internally but externally with your property administrator as well.
Taking action can depend on the severity of the defect.
A minor defect that is not systemic may be handled with an informal plan for corrective action. A more major or critical defect which indicates a greater cause for concern or increased risk to the government should be handled in a more formal way.
The root cause of the problem needs to be identified and a formal plan of action put in place.
We understand that managing large amounts of government property can be a challenge. With several regulations guiding how property needs to be tracked from acquisition through project closeout, property managers have their hands full.
However, having a flexible, user-friendly property management system can help! If you’d like to learn more about how eQuip! has helped government contractors meet the 10 outcomes of FAR 52.245-1 and streamline the process for conducting contractor self-assessments, please don’t hesitate to reach out (firstname.lastname@example.org). We hope to hear from you and hope your next CSA is a success!