Please use the following two slides as a template for your presentation at NES. Basic Property Management- Government Part III Presented by: Skip Adolph CPPM, CF and Ivonne Bachar CPPM, CF In collaboration with : Andy Anderson CPPM, CF and Richard Coatney CPPM Meeting the needs of all our “customers” while implementing effective processes. Two of the biggest challenges for us today!

Three areas of concern Physical inventory Subcontract Control Liability issues 2

3 3 Defining a Physical Inventory The process of physically locating and counting property and comparing it to the record of such property. Includes: –Planning –Performance –Posting of findings and adjustments –Analysis of results –Reporting to the designated officials

4 4 This thing called a Physical Inventory  Regulatory & Contractual Requirements  FAR (f.)(iv), FMR, OMB and DOE Order  Fiduciary Responsibility  Good Business Practice  Of special importance during acquisitions/mergers of organizations  Measure Health of Property System  Utilization  Excess Property Indicators  “Other Factors”

Subcontract Control A Complex Process The Contracts, Procurement, and Property Management departments must work together Seek to ensure that all applicable property control requirements are incorporated into the subcontract, including identification of property to be provided to the subcontractor and liability provisions. 5

FAR and Subcontract Administration FAR (f)(1)(v) Subcontractor Control (cont.): (B) “The Contractor shall assure its subcontracts are properly administered and reviews are periodically performed to determine the adequacy of the subcontractor’s property management system.” 6

Responsibility and Liability for Government Property Government generally acts as self insurer Generally contractors are not held liable for L,D,D and T Same as previous “Limited Risk of Loss” policy however, note the following: C.O. may revoke the Gov’t’s assumption of risk when the GPA determines contractor’s practices are inadequate and presents an undue risk to the government.

8 8 FAR Analysis of contractor’s property management system –The Government must conduct an analysis of the business practices used by the contractor in managing and accounting for Government property in its possession –The results determine whether the Government or the contractor assumes the risk for any loss, damage, destruction or theft of the Government’s property

Case Studies Time Now its time for that ROUSING FINISH we’ve been promising!! 9

Consider… Stewardship Accountability Responsibility Authority 10

First Quiz The Fast-Moving Brush Fire A brush fire pushed by high winds burns onto the plant partially destroying 2 outlying buildings apart from the main facility: One building used for storage of company and government- owned property The other building housed multiple contract active engineering projects Fire Department contributed the extended damage to lack of weed abatement around the buildings FD Hazmat reported improper storage/use of hazardous chemicals 11

Based on the scenario provided: –Is the company liable or does the government bear the risk? –What was the “root cause” of the damage to & loss of property? –Suggest what Company organizations will be required to contribute to a Corrective Action Plan 12 First Quiz The Fast-Moving Brush Fire

Acquisition-Ask yourself Before acquiring any property, ask yourself the following three questions: –Am I authorized to acquire property? –What kind of funds should I use to acquire this property? –Has the acquisition been authorized and approved by the proper entities? 13

Second Quiz Joe’s Challenge Joe, a new employee, needs a new oscilloscope to perform a particular test on some hardware. During his lunch hour he visits a website to see if any oscilloscopes are available. He gets lucky and finds one with a great price. Knowing the contract budget is tight he considers using his corporate credit card to acquire it immediately as he fears if he waits the thing will be gone. –A. Should Joe proceed with the purchase? –B. Wait until the purchase it authorized? 14

Questions??? 15