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DOD Contract and Property Perspectives

DOD Contract and Property Perspectives. Amber Barber March 16, 2010 NPMA National Capital Area Conference. From Contract to Property System. Contract Structure for Military Equipment has specific acquisition guidance (DOD 5000.02)

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DOD Contract and Property Perspectives

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  1. DOD Contract and Property Perspectives Amber Barber March 16, 2010 NPMA National Capital Area Conference

  2. From Contract to Property System • Contract Structure for Military Equipment has specific acquisition guidance (DOD 5000.02) • Proper Financial Accounting Treatment for Military Equipment (PFAT4ME) • Wide Area Workflow (WAWF) enables the Department to collect detailed property data to form accurate records based on the contract line item (CLIN) structure • Future capabilities are being developed to utilize available data within Accountable Property Systems of Record

  3. Enterprise / Net-Centric DoD CTR WAWF IUID - Value - Depreciation Pass master data Fixed Asset Accounting Property Systems CTR GFP On-Line “Paperless” System MAINT INV Functional data bases use UII as secondary key to access Master data Contractors Depots Supply Property Mgmt All Other Users 3

  4. Prior to CLIN formation • Upon receipt of a request for new procurement of military equipment, Business Financial Managers (BFM): • Ensure that for military equipment, the program description with the level 2 WBS facilitates proper determination of asset or expense type and financial accounting treatment by working with the Program Manager (PM) • Assign asset or expense type (e.g., military equipment, real property, internal use software (IUS), operating materials and services (OM&S), other General Plant, Property and Equipment (PP&E)) and financial accounting treatment (asset to be capitalized, asset held for inventory, or asset to be expensed) to each line item determined to be military equipment • Develop purchase requisitions separating requested military equipment deliverables • Collaborate as needed with Contracting Officers to ensure the integrity of the line item structure of the purchase requisition is carried forth when solicitations are written, proposals are received, and contracts are awarded

  5. PFAT4ME Reference Tool This reference tool was developed to aid BFMs with the application of the PFAT4ME structure. Steps 1-5 help determine if the new procurement is classified as “equipment.” Step 6 applies the current definition of “Military Equipment.” Step 6a recommends the application of PFAT4ME or to “expense” the equipment.

  6. Sample Structure Basis for CLINs • Acquisition Strategy Report: DOD Aircraft Program XXX • Attachment 1: Equipment Valuation Program Description • Air Vehicle (AV) - estimated unit cost $20,000,000 each. 10 aircraft planned to be procured in 1 lot. To include the following Government-Furnished Material: • 20 ZZZ Aircraft engines (2 each per aircraft) • Bulk titanium • 10 SINCGARS Radios (1 each per aircraft) • 10 AN/SPS 22 Radars (1 each per aircraft) • Systems Engineering/Program Management – Services only, no deliverables anticipated • System Test and Evaluation – Services only, no deliverables anticipated • Technical Publications – 10 sets technical manuals will be procured, but will not be separately priced. Cost included in cost of air vehicle.

  7. Sample Structure Basis for CLINs (2) • Training – Training will be provided by the aircraft manufacturer at Aircraft XXX Maintenance School. Training courses anticipated to be in excess of $100,000. • Peculiar Support Equipment – • 2 ea Air Vehicle XXX Engine Tester – estimated unit cost $500,000 • 2 ea Air Vehicle XXX Avionics Tester – estimated unit cost $135,000 • Common Support Equipment – • 2 ea Air Vehicle Tow Tractors - estimated unit cost $250,000 • Operational/Site Activation – Services only no deliverables over $100,0000 unit cost • Industrial Facilities – No industrial facilities will be procured for this Air Vehicle Program XXX • Initial Spares and Repair Parts – Not procured as part of the air vehicle and will be separately identified

  8. After the contract… • The CLINs developed become essential in the accounting treatment for each delivered piece of military equipment • Information may then be extracted from WAWF and used in fixed asset accounting, budget planning and management, property record development, and more

  9. Additional Information • Property & Equipment Policy website • http://www.acq.osd.mil/pepolicy/index.html • PFAT4ME on the web • http://www.acq.osd.mil/pepolicy/training_tools/PFAT4ME.html • PFAT4ME Reference tool • http://www.acq.osd.mil/pepolicy/training_tools/bfma_tool.html • PFAT4ME Training Course • Hosted by DAU (http://www.dau.mil) • Continuous Learning Module, Course number CLM040

  10. Questions? Comments? Contact us at: 703-604-6350, ext 105 Amber.Barber@osd.mil For general questions and information, visit our website: http://www.acq.osd.mil/pepolicy/ Thank You!

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