1. NASA NPD 4500.1, NPR 4500.1 and Their Relationship to Standards PRESENTATION TO NES 2014 NASA/CONTRACTOR SIG MEETING MIKE SHOWERS, ASSET MANAGEMENT ASSISTANCE, L.L.C.

2. FAR 52.245-1, Government Property  (b) Property management.  (1) The Contractor shall have a system of internal controls to manage (control, use, preserve, protect, repair, and maintain) Government property in its possession. The system shall be adequate to satisfy the requirements of this clause. In doing so, the Contractor shall initiate and maintain the processes, systems, procedures, records, and methodologies necessary for effective and efficient control of Government property. The Contractor shall disclose any significant changes to its property management system to the Property Administrator prior to implementation of the changes. The Contractor may employ customary commercial practices, voluntary consensus standards, or industry-leading practices and standards that provide effective and efficient Government property management that are necessary and appropriate for the performance of this contract (except where inconsistent with law or regulation).

3. Issues  No definition of “Industry Leading Practice or Standard”  No definition of “Customary Commercial Practice”  No clear internal NASA guidance related to recognition, acceptance, or implantation  Confusion between recordkeeping systems and overall property systems, plans, standards, etc.

4. Standards, Practices, Plans and Systems – NPD/NPR 4500.1 Definitions Customary Commercial Practice. A documented practice or standard accepted across an industry developed through a consensus process limited to that industry. Industry Leading Practice and Standard. A documented, proven practice or standard that exceeds common industry practice or standard in performance or effectiveness and in cost control. Industry leading practices and standards prove increased performance or effectiveness, in addition to decreased or constant cost through their acceptance and publication in refereed, professional journals. Voluntary Consensus Standards. Standards developed or adopted by voluntary consensus standards bodies, both domestic and international. (See OMB Circular A-119).

5. Voluntary Consensus Standards  PL 104-113, National Technology Transfer and Advancement Act of 1995  OMB Circular A-119  Implements Act  Requires use by Federal Agencies in lieu of Government unique standards  Defines the term  Purpose  Cost reduction  Promote Government use of private sector

6. NASA POLICY DIRECTIVE (NPD) 4500.1 Highlights  NASA policy regarding the “Administration of Property in the Custody of Contractors”  Issued September 13, 2013  Instruction to NASA Civil Servants  Available NASA NODIS website: http://nodis3.gsfc.nasa.gov/displayDir.cfm?t=NPD&c=4500&s=1  Requires  CO approval for the PROVISION of Government property to contractors  Regular review of contractor performance of property management  Prohibits NASA personnel from reducing or removing the requirement for contractors to maintain systems and records for offsite property

7. NASA POLICY DIRECTIVE (NPD) 4500.1 Highlights  Establishes Recordkeeping Requirements  NASA maintains fiduciary (financial) records  Contractor maintains stewardship (custodial or property) records for offsite property and some on-site property  NASA Procedural Requirements and Policy Directives are used for the management and recordkeeping of onsite property  NPR 4200 requires equipment valued greater than $5000 or which is defined by the center and NPR as sensitive be recorded in the NASA PP&E (NPROP)  NPR 4100 requires that NASA Centers establish material control and accountability systems  Stores Stocks – require central control  Program Stocks – may be decentralized  Property that does not qualify for RECORDKEEPING in NASA systems must be recorded in Contractor systems in accordance with FAR 52.245-1

8. Contractor Held /Used Recordkeeping Requirements Record On-site? NPR 9250 NF-1018 CHATS Financial ? FAR 52.245-1 Store Stock? Equipment ? NASA Recorded Program Stock? PP&E/ NPROP Qualify for internal control? SEMO Authorized NASA System No Yes No Yes

9. Standards, Practices, Plans and Systems – NPD 4500.1  NASA requires offsite recordkeeping and management to be performed in contractor’s systems  NASA permits the use of VCS, ILPS, and CCP  Use is conditional  Must be offsite  Government provided property  Must be adequate for contract requirements  Restricts imposition of additional requirements unless absolutely necessary for safety or security reasons

10. Standards, Practices, Plans and Systems – NPD 4500.1 1. Policy …”c. When NASA property is provided for use outside of a NASA Center or Installation, it is considered Government Provided Property (GPP ), and NASA will rely on contractors to be responsible for the stewardship of that property. This includes property acquired by the contractor when that property is titled to the Government under the Government Property clause or under contract financing provisions.” …”f. To avoid unnecessary costs associated with duplication of effort, contractors performing outside of NASA Centers and Installations are required by contract to record GP in existing corporate property systems and to manage property using corporate plans, procedures, practices, and standards. NASA projects, programs, and mission support activities shall not attempt to reduce or remove this requirement.”

11. Standards, Practices, Plans and Systems – NPD 4500.1 h. NASA will allow contractors, when performing within their own facilities, to follow industry leading practices and standards (ILP&S), voluntary consensus standards (VCS), or customary commercial practices (CCP) for the stewardship and management of GP to the extent that ILP&S, VCS, and CCP exist and are adequate for the management of property under the contract's circumstances. NASA officials should not impose additional GP management, recordkeeping, or reporting requirements on contractors when those contractors perform within their own facilities, and the requirements would create a NASA-unique requirement and result in increased administrative costs to the Agency through duplication of contractor records, systems, processes, or work effort.

12. NASA PROCEDURAL REQUIREMENT (NPR) 4500.1  NASA’s Contract Property Administration Manual  Found at the NODIS Website: http://nodis3.gsfc.nasa.gov/displayDir.cfm?t=NPR&c=4500&s=1  Preface and 8 Chapters  Generally follows a contract’s life cycle from preaward through closeout  Describes procedures related to contract property administration  Describes Procedures for NASA Personnel and PA Support Contractors

13. NPR 4500.1 Highlights  Preface – Purpose, Applicability, Legal and Regulatory Authorities, Applicable Documents and Forms  Chapter 1 - Objectives, Scope, Authorities and Responsibilities, Deviations  Chapter 2 - Pre-award processes, Solicitation Review, Evaluation of proposed property management plans  CHAPTER 3 - Delegation and Oversight of Property Administration Activities  CHAPTER 4 - Performance of NASA-Retained Property Administration Activities

14. NPR 4500.1 Highlights  CHAPTER 5 - Property Management System Audit  CHAPTER 6 - Contract Property Management Reporting  CHAPTER 7 - Special Situations  CHAPTER 8. Contractor Inventory Disposition  Appendix A. Definitions

15. Solicitation Phase - NPR 4500.1  Section 2.1 Requires the IPO to recommend the inclusion of the Solicitation Provision NFS1852.245-80, Government Property Management Information  Provision requires submission of:  Property management plan  Results of last PMSA  Intention to accept GFP or directly charge property not part of the deliverable  Use of GP from other contracts on the contract

16. Proposal Phase - NPR 4500.1  Section 2.2.1 Requires the IPO to Review the contractor’s proposed property plan based on:  Completeness – does the plan address all relevant “outcomes”  Acceptability – based on risk to safety, performance, and cost  IPO advises the CO of changes to plan needed to make it adequate

17.  Section 2.2.2.1 Discusses the use of VCS  IPO work with program to determine when NASA specific processes or standards are required to meet safety or other performance criteria  Discusses the difference between procedural and performance standards  Procedural standards are acceptable when they meet the requirements of the contract  Performance standards are designed to address OUTCOMES. They are preferred Proposal Phase - NPR 4500.1

18. OMB Circular A-119 Standards Definitions  Different types of standards  Performance standard –  Seeks results  Does not pre or proscribe methods  Contains a criteria for measurement or verification  Prescriptive standard –  Specifications  Methods

19.  Section 2.2.2.2 Discusses the use of ILPS  Requires that the practice or standard exceeds CCP or VCS  Requires documentation showing how it exceeds Proposal Phase - NPR 4500.1

20.  Section 2.2.2.3 Discusses the use of CCPs  Must be acceptable under contract circumstances  Section 2.2.2.4 Discusses the use of existing process, standards, systems  Many contractors were already performing adequately  Must be acceptable under contract circumstances  Use of VCS, ILPS, CCPs should be encouraged Proposal Phase - NPR 4500.1

21. PMSA NPR 4500.1 5.1.1.1 Through the PMSA, the PA evaluates the contractor’s management (control, use, preservation, protection, repair, and maintenance) of GP in its possession. The contractor’s performance and the PA’s evaluation criteria shall be consistent with the contractual requirements, as well as with VCSs, ILPSs, and CCPs for property management that have been determined to be adequate for the performance of the applicable contracts. Determination of adequacy of VCS, ILPSs, and CCPs may occur either as part of the award process or in response to a contractor’s reported changes.

22. PMSA NPR 4500.1  Section 5.1.4.2 Recommends that the PA request the contractor’s VCS, ILPS, CCPs, and processes as part of the PMSA pre-work  PMSAs should consider both the requirements of the contract AND any proposed VCS, ILPS, CCPs, or existing procedures in their evaluation

23. RELATIONSHIP OF ASTM STANDARDS TO FAR OUTCOMES

24. OVERALL PROPERTY MANAGEMENT  E2135-10ae1 Standard Terminology for Property and Asset Management  E2279-09 Standard Practice for Establishing the Guiding Principles of Property Management  E2452-12 Standard Practice for Equipment Management Process Maturity (EMPM) Model  E2675-09 Standard Practice for Property Management System Outcomes  E2936-13 Standard Guide for Contractor Self Assessment for U.S. Government Property Management Systems

25. ACCOUNTING  E2453-13 Standard Practice for Determining the Life-Cycle Cost of Ownership of Personal Property  E2378-13 Standard Practice for the Recognition of Impaired or Retired Personal Property

26. RISK  E2495-13 Standard Practice for Prioritizing Asset Resources in Acquisition, Utilization, and Disposition  E2608-08 Standard Practice for Equipment Control Matrix (ECM)  E2811-11 Standard Practice for Management of Low Risk Property (LRP)

27. RECEIVING, IDENTIFICATION & MARKING  E2605-13 Standard Practice for Receiving Assets  E2631-09 Standard Practice for Physical Placement of an Entity-Controlled Supplemental Identification Label  E2672-09 Standard Practice for Identification and Categorization of Tooling  E2606-13 Standard Practice for Receipt Notification as a Result of Tangible Asset Movement

28. RECORDS  E2499-11 Standard Practice for Classification of Asset Physical Location Information  E2604-09 Standard Practice for Data Characteristics of Equipment Records  E2812-11 Standard Practice for Uniform Data Management in Asset Management Records Systems

29. PHYSICAL INVENTORY  E2132-11 Standard Practice for Inventory Verification: Electronic and Physical Inventory of Assets

30. REPORTS AND RELIEFS OF STEWARDSHIP RESPONSIBILITY  E2131-09 Standard Practice For Addressing and Reporting Loss, Damage, or Destruction of Tangible Property  E2674-09 Standard Practice for Assessment of Impact of Mobile Data Storage Device (MDSD) Loss

31. UTILIZATION (MOVEMENT AND STORAGE)  E2671-10 Standard Practice for Defining Movements, Shipments, and Transfers of Tangible Property  E2715-09 Standard Practice for Moveable Property Storage  E2676-09 Standard Practice for Tangible Property Mobility Index (MI)  E2497-11 Standard Practice for Calculation of Asset Movement Velocity (AMV)

32. CLOSEOUT AND DISPOSAL  E2306-13 Standard Practice for Disposal of Personal Property  E2858-12 Standard Practice for Sales of Personal Property  E2607-08(2013) Standard Practice for Cannibalization/Reclamation of Serviceable Equipment Components to Support Demand Requirements

33. UNADDRESSED OUTCOMES  Utilization – actual use/assuring that property is used only for the purpose (contract) for which it was provided or authorized  Subcontractor control – work item scheduled for development of a standard this year  Performance standards with metrics

34. QUESTIONS? Mike Showers Asset Management Assistance, L.L.C. PO Box 552 Poolesville, MD 20837 mike@assetmanagementassistance.com 301.355.0849