1. Government Furnished Equipment Accountability
Mr. Colquitt “Quitty” Lawrence
AF/A4LM
2 February 2011 1

2. Overview AFAA Audit Report Rapid Improvement Event Game Plan
Data Call/Challenges
Contracts vs Contract Property Management System (CPMS)
Summary

3. AFAA Audit Report
AFAA report highlighted the AF did not properly account for and report GFE in AFEMS
AF imposed financial reporting of GFE onto contractors and transferred fiduciary responsibility away from the AF
Air Force lost accountability of GFE in excess of $22 billion (acquisition value), was unable to determine how much was financially reportable, and is at great risk for fraudulent activity
GFE recognized as Material Weakness at June ESC meeting
Thought about including a slide with the Material Weakness and the tasks that we included. 3

4. Rapid Improvement Event

5. Bottom Line IF: Policy is clear and aligned
Roles and responsibilities are clear and understood
Procedures are clear and documented so that people know how to execute their roles and responsibilities
Policy and procedures are strictly followed
Oversight ensures compliance
THEN:
100% of GFE will be recorded in AFEMS 5

6. RIE Objectives Respond to ESC:
Plan to ensure GFE situation does not happen again
OUTPUT :
Clarify Current Condition:
Problem/Scope
Definitions
Organizational roles and responsibilities
Process and IT
Root Cause:
What caused the problem to begin with?
Action Plan(s):
What needs to be done – and how it addresses the problem
Who will do it (OPR/OCR)
When it will be done 6

7. Participating Team Members
Almost 40
Participants 7

8. RIE Approach and Outcome
Inputs:
Team Member Briefings
Audit Findings
ESC Guidance
OSD GFE Process Flow
Processes:
Clarified the Problem
Scoped the Effort
Established Desired Future State
Reviewed Current State
Identified Key Problem Areas
Performed Root Cause Analysis
Created Action Items
Planned Way Ahead
Outputs:
Key Findings
Recommendations
Way Ahead Plan
(Documented in A3) 8

9. Scope Government-Furnishing Equipment (GFE) only:
Equipment going to/from contractors
Equipment coming out of Contractor Acquired Property (CAP) that is titled to and accepted by the government
Scope does NOT include:
Government-Furnished Material (GFM)
Contractor Acquired Property (CAP) 9

10. Applied A3 Model (Work-In-Progress)
8-Step Problem Solving Process
Step 1: Problem Statement
Step 2: Break Down the Problem/Identify Performance Gaps
Step 3: Set Improvement Targets
Step 4: Determine Root Cause
Step 5: Develop Countermeasures
Step 6: See Countermeasures Through
Step 7: Confirm Results and Process
Step 8: Standardize Successful Processes       10

11. Step 1: Clarify & Validate the Problem
Problem Statement:
“The Air Force is not properly accounting for GFE in the Air Force Equipment Management System (AFEMS)”
Additional References:
AFAA report published 11 Jan 2010 noted that “the Air Force lost fiscal accountability of GFE in excess of $22 billion” and “did not take effective actions to improve GFE financial reporting.”
Executive Steering Committee (ESC) provided guidance to address issue at June 2010 meeting 11

12. Step 2: Breakdown the Problem and Identify Performance Gaps
Examples:
Policy does not provide clear directions of expectations
Multiple organizations and players are involved in ensuring GFE properly accounted for in AFEMS – who is responsible for what is not clear
There is no consistent set of procedures for responsible parties to follow, and there are multiple data systems are involved in GFE tracking using different data elements
No established consistent means for ensuring actions are being taken and there is a lack of understanding among the players 12

13. Step 3: Set Improvement Targets
Desired Future State:
“All GFE recorded in AFEMS” 13

14. Step 4: Determine Root Cause
5-Whys / Root Cause Analysis: Summarized Fishbone Diagram
Awareness (5)
Compliance (4)
Policy (1)
Inconsistent
Training
Of Roles
Gaps
Lack of Internal Controls
Of Policy
Unclear
Of Impact
Cumbersome
Procedures
All GFE is not properly accounted for in AFEMS
Non Standard
Lots of Handoffs
Cumbersome
Unclear
IT Overlays
Non Standard
Many Players
Unclear Responsibilities
Drops at Handoffs
Undocumented
Information & Data (3)
Procedures (3)
Roles &
Responsibilities (2) 14

15. Step 5: Develop Countermeasures
Needs to be an AQ/A4/7 joint solution
Need to ensure policy is in alignment (DoD  AF  MAJCOM)
Need to ensure roles and responsibilities are clearly defined
Need to ensure procedures are consistent across organizations
Need to ensure appropriate representation for Business Case Analysis (BCA)
Identify team members (Acquisition, Contracting, Logistics, Legal, ...)
Create checklist for required actions
Establish action plan for providing GFE
Establish Accountability Property Office (APO) 15

16. Step 5: Develop Countermeasures
DEC10 ESC review and vector check – Seek directional approval
DEC10 Wrap-up bulk of ‘Discovery’ related Action Items
JAN11 Release Joint memo (AQ & A4L) tasking to identify GFE on Command and base contracts.
FEB11 Schedule follow-up session with GFE working group to drive through new discovery and develop greater detail to corrective action plan
APR11 Publish Guidance Memorandum(s)
Countermeasures:
Established bi-weekly GFE meeting to manage and drive progress
Periodically update senior leadership through A&FM IPT and Executive Steering Committee 16

17. Step 6: Seek Countermeasures Through
GFE Accountability Effort: Senior Officials: Mr Durante (SAF/AQX) / Mr. Allen (AF/A4L) Co-Leads: Maj Hicks / Mr. Lawrence Working Group: Participating Team Members Advisors: OSD AT&L, DCMA, AFAA/FSF 17

18. Game Plan

19. Game Plan Address the $22B (SAF/FMPR/A4LM/754 ELSG) – ECD: Mar 11
OPR: A4LM
Review contracts that accounted for 95% of GFE balance
Validate GFE on contracts
Populate AFEMS for missing GFE
Provide update to A&FM IPT – 17 Feb 11
Obtain and populate AFEMS with GFE information - ECD: Dec (SAF/AQXA/A4LM/A4LE//754 ELSG
All contracts with GFE
Validate information

20. Game Plan (cont’d)
Establish future processes to account for GFE – ECD: Sep 11
(SAF/AQXA/AQCI/A4LM/A4LE)
Develop Policy and Procedures – Nov 10 – Jun 11
Final coordination – Jul 11
Publish Policy and Procedures – Aug 11
Revise responses to AFAA audit – A4LM/A4LE
Coordinate with AFAA
ECD: Feb 11
Establish Air Force Property Office – Initiate Study – Mar 11
Single POC for Government Furnished Property
Established in Navy (Central Property Office)
Provide updates to A&FM IPT monthly and ESC quarterly

21. Data Call Data Call sent 5 January to Program Offices
Requested GFE on all contracts
Suspense of 10 Jan; still receiving additional/revised responses
Reviewed over 120 contracts and over 53K records
Working through submissions
Review Process
Validating each GFE line on contract
Comparing CPMS data
Verifying GFE is in Air Force Equipment Management System (AFEMS)

22. Challenges Program Offices and contractors understanding of tasker
Contractors’ data consolidated under GFP
Equipment
Aircraft
Spare parts
Tagging/listing spare parts as equipment
Data issues
Reliance on contractors to provide data
Incomplete data (e.g. DODAAC, SN/PN, Serial Number)
Data structure (e.g. contract numbers) must modified for matching purposes

23. Contracts vs CPMS to Address $22B (cont’d)
Weapon
System
CPMS
(AFAA source)
GFE Data Call –
All Equipment
Capital Equipment
Recorded in AFEMS
C-17
$ ,947.8M
$ *3,448.3M
$ M
$ TBD
B-2
2,835.7M
*1,328.7M
509.7M
29.0M
LGM-30
1,346.2M
120.6M
80.6M
F-15
1,098.9M
413.7M
349.3M
C-135
987.6M
2.6M
.6M
KC-135
933.1M
8.0M
.8M
E-3
597.5M
.7M
.3M
B-1
587.6M
124.6M
91.1M
C-130J
562.0M
.1M
F-16
486.0M
.0M
* Response includes aircraft, heavily skewing numbers

24. Summary Aggressively working the $22B disconnect
Game Plan in place with POCs and milestones
Validating data time consuming
Keep leadership informed through A&FM IPT and ESC