11 Basic Property Management- Government Part II Meeting the needs of all our “customers” while implementing effective processes….. Two of the biggest challenges for us today! Presented by: Skip Adolph CPPM, CF and Ivonne Bachar CPPM, CF For National Education Seminar, New Orleans, 2012 In collaboration with Andy Anderson CPPM, CF and Richard Coatney CPPM

Property System Birds Eye View Rules & Business Needs Policies & Procedures Getting the Goods (Need thru Acquisition) Property Control (In-use period) Reuse, Close-out and Disposal (Once item is excess) Tracking – Training – Awareness Reporting – Reconciliation – Adjustments Audits – Process Improvements 2

33 Contractor’s Responsibility It all starts with a plan!! “Contractors shall develop property management plans and systems, at the contract, program, site or entity level that reflect their efforts to obtain best value”. (Right out of )  Create with using the “Outcomes” as the initial template  Contractor to build a plan using Voluntary Consensus Standards or Industrial Leading Practices.  Government assumes risk as long as the contractor’s practices do not place the Government at risk.

44 What is a Property Management Plan?  A strategic look at how best to manage the government’s property holdings (“I am a custodian”) based on best value - Program - Site - Entity  What should the plan provide? - Performance outcomes (Acquisition thru Contract Closeout) - Using primarily Voluntary Consensus Standards and Industry Leading Practices

55 Contractor Outcomes (New Way)  The new FAR property rules are expressed in performance- based terms, i.e., as desired “ outcomes ”  Contractors can determine how best to achieve those outcomes — in accordance with: Voluntary Consensus Standards: “ Common and repeated use of rules, conditions, guidelines or characteristics for products or related processes and production methods, and related management systems” OMB Circular A-119  Standards used must be adequate for the contract performance as determined by the Property Administrator The National Technology Transfer and Advancement Act of 1995 (Public Law ), OMB Circular A-119, and FAR Part 12 all mandate the use of Voluntary Consensus Standards in lieu of Government-unique standards

Asset Lifecycle Business Processes  Receiving  Identification  Records  Movement  Storage  Physical Inventories  Utilization & Reuse  Consumption  Maintenance  Subcontract Control “Control, Preserve, Protect and Maintain while mitigating risk” Acquisition Disposition Award Close-out Property Management Reports Audits 6

77 Contractor Outcomes  Acquisition  Receipt  Records  Physical Inventory  Sub-contractor control  Reports  Relief of Stewardship  Utilization  Maintenance  Contract close-out  Acquisition  Receipt  Records  Physical Inventory  Sub-contractor control  Reports  Relief of Stewardship  Utilization  Maintenance  Contract close-out “ Contractors shall develop property management plans and systems, at the contract, program, site or entity level that reflect their efforts to obtain best value”

This is Property Management  Process Effectiveness Questions: Outcome: Acquisition  Acquisition Authority Contractual provisions and requirements related to Government Property are flowed down to appropriate contractor acquisition organizations Material transfers between contracts are adequately documented 8

This is Property Management  Process Effectiveness Questions: Outcome: Acquisition  Categorization of Property Categorization of property is correctly determined before acquisition or fabrication  Ordering Practices Acquisition documents include detailed and accurate description of assets to be acquired and contract or equivalent code designator 9

This is Property Management  Process Effectiveness Questions: Outcome: Receiving  Receiving Process Receiving reports are promptly prepared that document items and quantities received, condition, shipping data, date received, etc. Incoming property is provided adequate protection and storage during the receiving process. 10

This is Property Management  Self Assessment How many Organizations contribute to an effective PM System? How many Organizations are responsible for an effective PM System? How many Organizations have the responsibility to maintain an effective PM System? 11

This is Property Management  Self Assessment Historical trends  What’s the track record? Where have there been weaknesses?  Specific processes or functional areas? Repeat findings  Isolated or systemic?  Failed or ineffective corrective actions? 12

This is Property Management  Self Assessment The Property Management “Process”  Property “Control” System or Property “Management” System? A production line of data Processing data at specific points and passing it on Produces data generation points The data is used to quantify system effectiveness 13

Functional Flowchart 14

This is Property Management  Self Assessment The use of Industry Leading Practices and Voluntary Consensus Standards  Established references  Maintain consistency in measurement  Standardized assessment outcomes  Consistency in trends and historical assessments 15

16 Voluntary Consensus Standard  VCS means common and repeated use of rules, conditions, guidelines or characteristics for products, or related processes and production methods and related management systems. Voluntary consensus standards are developed or adopted by domestic and international voluntary consensus standards making bodies. The USG does not endorse any one VCS or VCS making body  However, the USG has had creative involvement with ASTM International E-53 Committee

17 Industry leading practices… cont  Industry leading practices (ILPs) are generally accepted processes, including best practices, that have been proven throughout related businesses, to be managerially and economically effective, efficient and successful at meeting particular objectives of a contractor’s management system, and where specified, in compliance with the required government outcomes.

ASTM, Int. and NPMA  American Society for Testing and Materials, International  Joint effort to establish industry standards throughout property world  Should attempt to incorporate into your organizations 18

19 ASTM International Standards for Property  E Physical Inventory  E Terminology  E Establishing Full Valuation of L,D & D During an Inventory  E Administrative Control of Property  E Establishing Guiding Principles of Property Management  E Recognition of Impaired or Retired Property  E Determining Life-Cycle Cost of Ownership  E Classification of Equipment Phys. Location Info  E Standard Practice for Calculation of Equipment Movement Velocity  E Standard Practice for Equip. Matrix  E Practice for Receiving Prop.

20 Another Example of Voluntary Consensus Standards  ISO an international consensus on good management practices with the aim of ensuring that the org. can deliver: Meet the customer’s quality requirements, and Applicable regulatory requirements, while aiming to enhance customer satisfaction, and Continual improvement

End of Part II  Want to see you here tomorrow for our rousing finish!! 21