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Regulatory Outlook: Where we’ve been; where we’re going

This presentation provides an outlook on regulatory changes in government property management and the impact on contract administration services.

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Regulatory Outlook: Where we’ve been; where we’re going

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  1. Regulatory Outlook: Where we’ve been; where we’re going Presented By: Tom Ruckdaschel July 25, 2011

  2. The information contained in this presentation represents only the personal views of the presenter and not necessarily those of the United States Government, DoD or DCMA. The information presented should not be construed as changing or modifying any statute, regulation, DoD or DCMA policy or guidance, or any term(s) of any contract with the United States Government or any department or agency of the United States Government. The information presented also does not affect in any way, any on-going or future property management system analysis

  3. DCMA Mission We provide contract administration services to the Department of Defense acquisition enterprise and its partners to ensure delivery of quality products and services to the warfighter; on time and on cost

  4. Where DCMA Fits Under DoD Secretary of Defense Chairman Joint Chief of Staff Under Secretary of Defense (Acquisition, Technology & Logistics) Army Navy Air Force Marine Corps Assistant Secretary of Defense (Acquisition) (Combat Support Agency)

  5. Organizational Structure Strategic Effects Office of the Director General Counsel Chief of Staff Corporate Support EEO Office of Independent Assessment Reserve Affairs Strategic Portfolio Management & Integration Directorate Human Capital Directorate Finance Business Operations Directorate Aircraft Operations Directorate Contracts Directorate Engineering & Analysis Directorate Quality Directorate Information Technology Directorate International Directorate Operations Directorate Special Programs Directorate Operational Streamlined CMO Streamlined CMO Streamlined CMO Primary CMO Primary CMO Primary CMO Eastern Region Central Region Western Region Tactical

  6. Our CONUS Presence • Special Programs • Special Programs East • Special Programs South • Special Programs West • Eastern CMOs • Headquarters - Boston • Atlanta • Baltimore • Boston • Garden City • Hartford • Manassas • Lockheed Martin Marietta • Lockheed Martin Moorestown • Orlando • Philadelphia • Boeing Philadelphia • Sikorsky Aircraft • Springfield • Raytheon Tewksbury • APO • NSEO • Western CMOs • Headquarters – Carson • Denver • Boeing Huntington Beach • Lathrop • Lockheed Martin Denver • Boeing Long Beach • Los Angeles • Palmdale • Phoenix • Santa Ana • Lockheed Martin Sunnyvale • Raytheon Tucson • NPO • Central CMOs • Headquarters - Chicago • Chicago • Dallas • Dayton • Detroit • Lockheed Martin Forth Worth • Bell Helicopter Forth Worth • Huntsville • Boeing St. Louis • Twin Cities • AMP • AIMO

  7. Our International Presence

  8. Our Core Functions FAR 42.302(a)(b) Contract Management Cost and Pricing Property and Plant Clearance Quality Assurance Engineering and Analysis Support Delivery Schedule Management Earned Value Management Contract Safety Transportation

  9. Property and Plant Clearance • Four Business Areas: • Property Group(CONUS) • DCMA International (OCONUS) • Contingency Contracting (Iraq/Afghan) • Special Programs • Ensure contractors meet FAR/DFARS • requirements • Provide effective and efficient oversight & • surveillance (property audits) • Perform reutilization screening (of excess • property, as required) [Plant Clearance • Group] • Evaluate contractor reported property loss, • damage, destruction, theft

  10. Current Environment • Government property management continues to evolve • Regulations, policies, standards, procedures • People (competencies, process analyses) • New DAU property course (IND 105)! • Technology • Regulations (FAR/DFARS) have: • Refreshed • Transformed • Clarified; updated • Improved (and, yes, challenged) • As 2012 approaches— • Most major “federal” regulatory changes appear complete • New (DoD) rules will seek to improve on established baselines

  11. Observations We’re about here! • Five year learning curve--beginning with FAR rule 2007 • Understanding the context • Learning new language and requirements • Negotiating • Revising procedures to conform • Resolving • Resolving disputes/interpretation • Settling down • Agreeing on new baselines • Improving (moving forward) • Self assessments/new sense of audit protocols

  12. Observations (cont.) • We’re now seeing different aspects of Govt property management melding together • Finance, logistics, property accountability • Sustained “thirst for information” from DoD Military Services/DoD Components • DoD seeking common processes for obtaining standard data • We see this in: • “Ask a Professor” responses: many “property” questions now deal with “non” contract property issues; e.g., logistics, finance, UID, Govt property accountability • New DAU course on GFP (CLC 051) revealed the integrated policy environment; e.g., GFP as it effects program managers, property administrators, and contracting officers

  13. Today’s Regulatory Baseline • Two property clauses published in the last five (5) years • 52.245-1 (June 2007) • 52.245-1 (August 2010) • Both stem from the same major reform effort • Four new DFARS clauses now in place: • 252.211-7007—Reporting GFE to the UID registry • 252.245-7001—Tagging, Labeling and Marking of GFP • 252.245-7002—Reporting Loss of Government Property • 252.245-7003—Contractor Property Management System • Plus…Procedures, Guidance and Information 2010-001

  14. Baseline (cont.) • Four new property cases in play • FAR Case 2010-009 • DFARS Case 2009-D008 • DFARS Case 2009-D043 • DFARS Case 2010-D018

  15. Overview: FAR Case 2010-009 • Proposed rule published April 4, 2011; public comment period ended June 5, 2011 • Major changes include: • New/revised definition of unit acquisition cost • Clarification of plant clearance policy • Revision of contractor scrap requirements; including deletion of requirement for Govt approval of contractor scrap procedures • New/clarified policy on property abandonment • Revised Contracting Officer responsibilities—determine: • Extent of contractor liability—based upon corresponding damages • Appropriate form and method of recovery, repair, replacement or other restitution • Deposit of monies (from property loss)--U.S. Treasury unless otherwise authorized by statute

  16. DFARS Case 2009-D008 • Proposed rule published Dec. 3, 2010 • Major change: establishes a DFARS clause for property disposition/plant clearance • Includes: • Requirement to use PCARSS • Clarified demil requirements (must be included in contract terms and conditions) • New PGI for trade security control clearances

  17. Quick Overview PCARSS Plant Clearance Automated Reutilization and Screening System The “automated Inventory Schedule” [SF 1428] Deployment began in 1995 Used by most DoD contractors

  18. DFARS Cases (cont.): • Case 2009-D043: Reporting GFP to the DoD Registry (GFP module) • Revises current DFARS clause 252.211-7007 • Status: • Proposed Rule published Dec. 22, 2010 [cancelled] • New proposed rule will be published in 2011 • DFARS Case 2010-D018: Responsibility and Liability • Codifies Class Deviation 2010-O0003, Responsibility and Liability for Government Property • Consistent policy for contractor liability (for property loss); negotiated contracts awarded under competitive procedures • Status: Final Rule pending

  19. Useful Information • Review DFARS and FAR proposed and interim rules • Change Notices:http://www.acq.osd.mil/dpap/dars/change_notices.html • Submission input of public comments: http://www.acq.osd.mil/dpap/dars/out_for_public_comment.html • View public comments on proposed & interim rules • DFARS rules: http://www.acq.osd.mil/dpap/dars/out_for_public_comment.html • FAR rules: www.regulations.gov • View status of open cases • DFARS rules: http://www.acq.osd.mil/dpap/dars/case_status.html • FAR rules: http://www.acq.osd.mil/dpap/dars/far_case_status.html

  20. Any Questions? email tom.ruckdaschel@dcma.mil Telephone (804) 734-0505

  21. BACK UP

  22. Procedures, Guidance & Information NEW! PGI Case 2010-P001 (245) Published July 23, 2010 First PGI for Contracting Officers involving Government Property Provides Guidance on: Furnishing GP Documentation Transfers of Acct. Attachments to solicitations and awards Title & Disposition

  23. PGI (cont.) A companion resource to the DFARS that contains: mandatory and non-mandatory internal DoD procedures non-mandatory guidance Supplemental information

  24. Why a PGI? • Poor/no implementation of 2007 FAR Part 45 & clause changes • Noncompliance with FAR 45.102(b) • Not obtaining Property Management Plan • Not providing property lists to offerors with required data • Growing number of audit findings • Get GP right…on the contract • Provide guidance on delivery of CAP

  25. Overview of PGI 2010-001 • Furnishing GP (PGI 245.103-70) • Responsibility: Requiring Activity (as a part of acquisition planning under FAR Part 7) • Building a business case under FAR Part 45.102: • Element 1: Government’s best interest; • Element 2: Overall benefit to the acquisition; • Element 3: Government’s assumption risk; • Element 4: Requirement cannot otherwise be met

  26. Overview (cont.) • Element 1 • In the Government’s best interest • Discussion should be specific & factual • Actual or projected dollars should be addressed • Discussion should address the following: • Economy – achieves lowest cost or price objective • Standardization – critical need for precise replication • Security – needed for national security reasons • Expedite production – achieving timely delivery • Scarcity – Government is the only source • Maintain the Industrial base – ensure future capability • Contract type – potential for a more favorable contract

  27. Overview (cont.) • Element 2 • Overall benefit to the acquisition must significantly outweigh the costs of administration • Property in the hands of contractors drives program costs • Controlling • Managing • Disposal • Costs must be either less than what the contractor might otherwise incur; or benefit to the Government must outweigh additional costs

  28. Overview (cont.) • Element 3 • Government’s assumption risk • Risk analysis must demonstrate that the Government is not substantially increasing its risk • Risks must be considered, discussed and documented

  29. Overview (cont.) • Element 4 • Government requirements cannot otherwise be met • Is the Government property being provided critical and significant to meeting acquisition plan objectives

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