NASA Property Michael (Mike) Showers Manager, Contract Property Program

Expectations NFS Update To Do List NESS Update Financial Reporting Management Controls Space Shuttle Closeout AGENDA

EXPECTATIONS

Outcomes, Standards of Practice Performance Standards VCS Industry Practices ILPs

OUTCOMES FAR Discusses Outcomes – Minimizes Government Direction – Maximize Flexibility in Process – Adopt and Promote the Use of VCS – Promote the use of Industry Leading Practices and Standards

STANDARDS OF PRACTICE How to…… Procedures Process Oriented Old FAR 45.5

VCS Voluntary Consensus Standards – "voluntary consensus standards" are standards developed or adopted by voluntary consensus standards bodies, both domestic and international. – A voluntary consensus standards body is defined by the following attributes: (i) Openness. (ii) Balance of interest. (iii) Due process. (vi) An appeals process. (v) Consensus.

NOT VCS Non-consensus standards – Industry Standards – Company Standards – De facto Standards Government – unique standards Legally mandated

INDUSTRY LEADING PRACTICES AND STANDARDS LEADING – Better than accepted industry practice More cost effective Improved practices Higher standards – Proven Claims insufficient Publication and repetition

ILPS INDUSTRY LEADING PRACTICE OR STANDARD is a documented, proven, practice or standard that exceeds common industry practice or standard in performance or effectiveness AND in cost control.

ILPS Industry leading practices or standards prove increased performance, or effectiveness, in addition to decreased or constant cost through--- PUBLICATION AND REPETITION

INDUSTRY STANDARDS Common Industry Practice or Standard – A documented practice or standard accepted across an industry through a consensus process limited to that industry.

PERFORMANCE STANDARD " Performance standard" is a standard as defined above that states requirements in terms of required results with criteria for verifying compliance but without stating the methods for achieving required results. OMB Circular A-119

BOTTOM LINE Less How More How Well!

NFS UPDATE

Clauses and Solicitation Procedures – Final rule published January 12, 2011 – Implements 2007 FAR Changes Procurement Notice (PN) – 56.html – Implements remaining NFS internal changes – Consolidates internal and external changes – Published early June – Obviates PIC and PIC 05-07

Solicitation Provision Changes Government Property Management Information – Changes default condition from As-Is, Where-Is to FAR standard – Adds an alternate Used when Contracting Officers are able to provide access to existing property for contractor review prior to bid submission Returns As-Is, Where-Is conditions

Solicitation Provision Changes , List of Available Government Property – Section for property offered under standard FAR Government Property Clause – Section for property offered under FAR clause AS-IS, Where Is

CLAUSE CHANGES FROM PIC Contractor Requests for Government Provided Equipment – Limited to equipment acquisition only – Alternate allows self screening of approved requests – Ties to financials

Identification and Marking of Government Equipment – Items may be marked using commercial techniques if they are durable enough to survive the item Property Management Changes – Requires submission of reports to the PA rather than the IPO CLAUSE CHANGES FROM PIC 07-09

Physical Inventory of Capital Personal Property – Requires submission of reports to the PA rather than the IPO

OTHER CLAUSES Financial Reporting of NASA Property in the Custody of Contractors – No change other than citation to FAR List of GFP – Used with FAR List of GFP – Used with FAR

NFS GOVERNMENT INSTRUCTIONS 1845 – Revision published under PN – Reorganizes and removes guidance to contractor from 1845 (except 1018 instructions) – Add solicitation requirements – Better define roles of NASA IPO, PA, and CO – Discuss support delegations – Provides guidance on processing of requests for equipment 1852 – Recently Revised – January 12, 2010 Federal Register final rule Clause revisions – Some adds – Several Revised Solicitation provisions added

NFS GOVERNMENT INSTRUCTIONS Provided clause prescriptions limited FAR 45.3 to commercial use of GP discussed contracts with foreign entities Sets NASA requirements for delegations Requires the CO to obtain updated property management plans (during solicitation phase) when the IPO or PA determines them to be inadequate

NFS Guidance - Clauses Requires identification and marking for delivered property Requires notification when contractor wishes to change property standards and practices – Loss reporting – Physical Inventory – Recordkeeping – Transport or delivery – Disposition /77 Lists of GFP under FAR and 2 respectively Physical Inventory of Capital Personal Property requires annual inventory verification of items valued over $100K

NFS GOVERNMENT INSTRUCTIONS Requires delegation of PA whenever property segments are managed under FAR GP clause Defines general duties of NASA PA Defines general duties of NASA PLCO Requires scrap reporting on inventory schedules (or electronic equivalent) lacking approved scrap procedure Requires the CO to direct contractor to provide additional information on transfer documents when incomplete

MANAGEMENT CONTROLS

Property Management Control Structure Property Management System Audit Property Control System Analysis Industrial Property Officer Oversight HQ Compensating Controls Review Contract Requirements

PROPERTY ADMINISTRATION Overseen by center Industrial Property Officer Some PA activities and surveys are performed by NASA Personnel NASA PA retains partial responsibility for on- site contractors

DELEGATIONS DCMA for commercial contractors ONR for non-profit research and educational NF 1430c delegates CO authority and responsibility for Property Administration NF 1431d delegates CO authority and responsibility for Plant Clearance

NF1430c – PROPERTY ADMINISTRATION Recognizes delegated agency authorities for most actions Requires special actions for NASA – Review and evaluate proposed property procedures when asked – Provide current system status – Provide current risk determination – Provide PCSA summary within 30 days of completion – Provide immediate notification of increased risk for loss – Verify all reports

NF1430c – PROPERTY ADMINISTRATION Special actions for NASA continued – Property values Ascertain the source of recorded property values Determine whether that source has been reviewed by the Government Qualify value data element if appropriate – Identify components of special test equipment when it may be operated separately – Review for correct categorization of property – Provide Loss reporting

PROBLEM DoD’s thresholds for risk are higher than NASA’s – The value of their contracts is higher by far – NASA’s $10 million threshold does not trip their risk standards

RESOLUTION! Special Delegation Instructions – Optional In NF 1430C – For “major” contractors Designated by NASA Finance as having property holdings exceeding $10 million – Requires Annual reviews of contractor records, physical inventory and reports regardless of DoD risk assessment Written, annual reports to the IPO and DCFO – OK

INTERNAL NASA REVIEWS Compensating Control Reviews Internal Reviews of all NASA property programs – Eight Centers/Installations Complete – Two Remaining – SSC in two weeks Performed by HQ Subject Matter Experts

INTERNAL NASA REVIEWS Current Contract Property Concentration On: – Assuring reviews of solicitations for correct language – Assuring reviews of contractor’s proposed systems – Assuring proper delegations of authority – Assuring completion of PMSAs Future Reviews Concentrate On – Quality of PMSAs – Reporting and Internal Metrics

TO-DO LIST

NASA Procedural Requirements for Property Administration – Internal NASA Guidance for NASA IPOs, PAs, and COs – Supplements NFS 8 Chapters covering all aspects of PA Includes information on performance of property management system audits Incorporates risk based scheduling Addresses specific NASA requirements To-Do List

To Do List Delegation Instruction Update – Last update just before FAR change – Need to incorporate FAR and NFS changes – Back Burner at present but getting hotter Vehicle Management and Reporting – Needed to implement new Executive Orders – Support the NASA MVA/DMV requirements – Look for – Increased requirements for acquisition approval – Increased requirements for reporting and recordkeeping

FINANCIALS

FINANCIAL Improvement – Property no longer considered a material weakness New Auditor This Year – PWC replaces E&Y Will be looking specifically at Contractor Held Property – Still cited as a cause for concern

FINANCIAL Property Management Objectives – Bottom Line Obtain “Clean Opinion” – Leverage property management audits to the greatest extent possible to limit repetitive processes and reduce cost to the Government and the contractor Must be able to depend on findings of another audit activity (Yellow Book) May require additional oversight of PMSA process

NESS

NESS CHANGES No changes to report or reporting requirements for contractors Additional items for NASA IPOs and NASA IPMS personnel (PMSA Related) VASTLY different requirements to obtain user id – HSPD12 Requirement – Outside of NESS – NASA Wide – Must obtain NASA Identity – Must be provided access to NESS – Must take NASA IT Training Takes place THIS YEAR!

SPACE SHUTTLE CLOSEOUT

Remaining shuttle property to be dispositioned after last wheel stop (starting NOW!) STS 135 Landed last week Final Flight of Atlantis and Shuttle Approximately 1.2 million line items of property Located at contractor and NASA sites across the country 75% In contractor custody/25% Accountable to NASA 75% located on NASA Installations/25% Located at Contractor Facilities Expected to take over 2 years to disposition all property

SHUTTLE PLACEMENT Announcement By Administrator April 12 – Discovery – National Air and Space Museum – Endeavor – California Science Center – Atlantis – Kennedy Space Center – Enterprise – Intrepid Sea Air and Space Museum

ARTIFACT PLACEMENT Significant GSA Assistance Restricted to – Federal Agencies – Schools – Non-profit museums via State Agencies for Surplus Property >29000 Potential Artifacts Screened – (Individual Items) >3000 Allocated, most shipped 7 Screening Periods Complete, 8 th underway Shuttle Tiles – Schools only – originally available – >4000 requested

What’s Next for NASA? Recognize the incredible accomplishments of those who were part of Shuttle Program Recommit NASA to Human Space Flight Live and work on the International Space Station Use AMERICAN companies to place people and property in low earth orbit Focus on deep space exploration Travel to the Moon, asteroids, and Mars Build a deep space crew vehicle and heavy lift rocket Continue science missions both in the solar system and to earth Build the future through STEM Education

QUESTIONS? Contact: Mike Showers, Manager, NASA Contract Property Program or Phone: