Preparation of Property Audit for Receiving, Identification, and Records

1. Preparation of Property Audit for Receiving, Identification, and Records Presentation by: Rosanne (Beth) Green, consultant and Tara Miller, Program Manager, ReDe/Critique

2. Receipt of Government Property

3. Receiving FAR 52-245-1 (f) Contractor plans and systems (1) (ii) Receipt of Government Property • (ii) Receipt of Government Property. The Contractor shall receive Government property anddocument the receipt, record the information necessary to meet the record requirement of paragraph (f)(1)(iii)(A)(1) through(5) of this clause.

4. Receiving FAR 52.245-1 (f) Contractor Plans and Systems (1)(ii) Receipt of Government Property (A) Government Furnished Property • The Contractor shall furnish a written statement to the Property Administrator containing all relevant facts, such as cause or condition and a recommended course(s) of action, if overages, shortages, or damages and/or other discrepancies are discovered upon receipt of Government-furnished property.

5. Receiving FAR 52.245-1 (f) Contractor Plans and systems (1)(ii) Receipt of Government Property (B) Contractor-acquired property • The Contractor shall take all actions necessary to adjust for overages, shortages, damage and/or other discrepancies discovered upon receipt, in shipment of Contractor-acquired property from a vendor or supplier, so as to ensure the proper allocability and allowability of associated costs.

6. Receiving • ASTM E2605-08 – Receiving Property • Covers the process of verifying, recording and reporting receipt of tangible personal property • This Standard details the fundamental concepts of the receiving process

7. Receiving • Receipt of Government Property (Outcome #2) • The process of accepting property into an organization • Property screened against procurement documentation • Confirmation the order • Condition • Discrepancies noted and acted upon • Securing of the property • Timely completion of documentation

8. Receiving • Receipt of Government Property (Outcome #2), continued • Receiving documentation may include • Carrier’s Freight Bill: A form originated by the trucking company, railroad or airlines • Supplier’s Packing List: A listing of the items shipped

9. Receiving • Receipt of Government Property (Outcome #2), continued • Receiving Report: An internally-generated document that lists the items and quantities being acquired on a PO • Receiving Voucher Log: Provides receiving activity information and a way to trace lost or misappropriated items

10. Receiving • Receipt of Government Property (Outcome #2), continued • Obvious damage of shipments should be noted on the Receiving documents • Before a discrepant shipment is accepted, the signature of the carrier’s representative (most often the driver) should be obtained, acknowledging the discrepancies

11. Receiving • Receipt of Government Property (Outcome #2), continued • If an item is delivered directly to the end user or requires unusual receiving accommodations due to size or other conditions, the recipient of the item must immediately notify the receiving department of the delivery. • Once property has been received, inspected, and accepted, it may be assigned an identification number if it meets your tagging criteria.

12. References • Receiving • FAR 52.245-1 (f) Contractor Plans and Systems (1)(ii) Receipt of Government Property • FAR 52.245-1 (f) Contractor Plans and Systems (1)(ii) Receipt of Government Property FAC 2005-56 April 2, 2012 • FAR 52.245-1 (f) Contractor Plans and Systems (1)(ii) Receipt of Government Property (A) Government Furnished Property • FAR 52.245-1 (f) Contractor Plans and systems (1)(ii) Receipt of Government Property (B) Contractor-acquired property • ASTM E2605-08 – Receiving Property

13. Identification of Government Property

14. Identification FAR 52.245-1 (f) Contractor plans and systems (continued) • (ii) Identify as Government owned in a manner appropriate to the type of property (e.g., stamp, tag, mark, or other identification); and manage any discrepancies incident to shipment

15. Identification ASTME2631-09 Physical Placement of an Entity–Controlled Supplement Identification Label • Significance and Use • When identification of equipment is needed for purposes of control, management, or determining ownership, or a combination • Scope • This practice is for supplemental identification labels assigned by an entity and affixed to equipment to permit control

16. Identification • The marking of property by which one or more of the following can be ascertained: • Ownership • Part number • Serial number • Model number • Description • Contract number

17. Identification • Tagging Process • Property ID should be affixed to the item, if possible • Examples of items that may be NOT have tags affixed to it • Hardware that has special features – Flight • Too Small • Environmental Conditions • ID process should be incorporated in the receiving process

18. Identification • Types of property generally requiring serialized tags are: • Capital equipment • Special requirement items such as those needing recurring maintenance or calibration • Rented, leased, or loaned equipment • Sensitive or controlled property • Government property that will not be expended, be consumed, or become part of a deliverable end-item

19. Identification • Types of property generally requiring non-serialized tags are: • Components and accessories to capital equipment, where the main component is identified according to the system definition • Components and accessories of low-value government property that will not be expended or consumed, nor become part of a deliverable end-item

20. Identification • Identification methods are numerous, from a simple tag or mark on the item, to a barcode, to more elaborate tagging by electronic transmitters. The optimum method can be determined by the following criteria: • Type of asset to be controlled • Data collection method to be used (scanning or pinging, etc.) • Environment in which the property item must reside (climate, humidity, etc.)

21. Identification Identification methods criteria: (continued) Ease of reading (whether visually or electronically) Size of the decal or tag Surface onto which the tag(s) will be applied The total cost per decal, tag, or mark, including (where applicable) any readers Availability

22. Identification • There are several methods of identification • Bar coding, stamping, marking, etching, network pinging, and Radio Frequency Identification (RFID) • What ever the methods your activity chooses, it must be outlined in procedures for audit purposes!

23. Identification • For audit purposes your procedures must show how your organization will handle property located at a different locations other than what is considered to be the main business address. • All assets should be identified using the same methods as those used for assets at the main address unless your contract dictates otherwise.

24. References • Identification • FAR 52.245-1 (f) Contractor Plans and Systems (1)(ii) Receipt of Government Property • ASTME2631-09 Physical Placement of an Entity–Controlled Supplement Identification Label

25. Records Of Government Property

26. Records FAR 52.245-1 (f) Contractor plans and systems (iii) Records of Government Property • Records of Government property. The Contractor shall create and maintain records of all Government property accountable to the contract, including Government furnished and Contractor-acquired property.

27. Records FAR 52.245-1 (f) Contractor plans and systems (iii) Records of Government Property (continued) – (A) Property records shall enable a complete, current, auditable record of all transactions and shall, unless otherwise approved by the Property Administrator, contain the following:

28. Records FAR 52.245-1 (f) Contractor plans and systems (iii) Records of Government Property (continued) (A) (1) The name, part number and description, manufacturer, model number, National Stock Number (if needed for additional item identification tracking and/or disposition).

29. Records FAR 52.245-1 (f) Contractor plans and systems (iii) Records of Government Property (A) (continued) • (2) Quantity received (or fabricated), issued, and balance on hand. • (3) Unit acquisition cost. • (4) Unique-item identifier or equivalent (if available and necessary for individual item tracking). • (5) Unit of measure.

30. Records FAR 52.245-1 (f) Contractor plans and systems (iii) Records of Government Property (A) (continued) • (6) Accountable contract number or equivalent code designation. • (7) Location. • (8) Disposition. • (9) Posting reference and date of transaction. • (10) Date placed in service (if required in accordance with the terms and conditions of the contract).

31. Records E2604-09 ASTM Standard Practice for Data Characteristics of Equipment Records • Acknowledges the FAR required information but also provides guidance leading to the recording of optional data • If a contractor utilizes the information from this Standard, the contractor should identify in their procedures what “optional data elements” they will be utilizing as well as the essential data elements

32. Records E2812-11 ASTM Standard Practice for Uniform Data Management in Asset Management Records Systems • Provides entities with a guideline for establishing and maintaining a level of data consistency in asset management records systems that will result in useful information for decision makers • Have you every had to run a report and discovered your records are not consistently entered?

33. Records E2604-09 ASTM Standard Practice for Data Characteristics of Equipment Records • Acknowledges the FAR required information but also provides guidance leading to the recording of optional data • If a contractor utilizes the information from this Standard, the contractor should identify in their procedures what “optional data elements” they will be utilizing as well as the essential data elements

34. Records E2812-11 ASTM Standard Practice for Uniform Data Management in Asset Management Records Systems • Provides entities with a guideline for establishing and maintaining a level of data consistency in asset management records systems that will result in useful information for decision makers • Have you every had to run a report and discovered your records are not consistently entered?

35. Records • Records (Outcome #3) • A record system that shows all the required basic information • Establishing a Record • Timeframe required • System of record • Mandatory fields • Optional, useful fields • Financial data and related accuracy • What happens with support documents The soul of your property Control System

36. Records • Records (Outcome #3) • Once these decisions are made, the specific decision-making processes as to how, when, and by whom the property will be controlled- is further defined in the contract, policies, procedures, and operational guidelines • The Auditor will be measuring your procedures against your processes and if they do not see a risk to the Government during the audit your Property Management System will be considered acceptable.

37. Records • If the Property Management System does not comply, these are just a few potential consequences • Increased surveillance and findings • Need to implement corrective action plans • Increased liability and financial risk • Damaged credibility with customers • Increased borrowing costs

38. Records FAR 52-245-1 (f) Contractor plans and systems (iii) Records of Government Property • (B) Use of Receipts and Issue System for Government Material. • When approved by the Property Administrator, the Contractor may maintain, in lieu of formal property records, a file of appropriately cross-referenced documents evidencing receipt, issue, and use of material that is issued for immediate consumption.

39. Records • Material Records • If you use Receipt and Issue, your plan must stipulate that you are going to use this type of record. Also, your procedures must show this process. • To Avoid Record Errors – • Educate • Analyze • Self Audits • Establish Goals of Higher Accuracy (take corrective action

40. Records • Record Retention – • FAR Subpart 4.7—Contractor Records Retention • Most are 3 years after final payment for certain records. • This could be different for each agency, it could be more stringent. • Check requirements in your contract

41. Records ASTM E2499–06 Classification of Equipment Physical Location Information • Covers standardizing practices and terminology related to information conveying the physical location of equipment. • Describes ten increasingly specific levels of equipment physical location information, assigning a standard name and level number to each.

42. Records ASTM E2499–06 Classification of Equipment Physical Location Information, continued • Covers the process for verifying, recording, and reporting receipt of tangible personal property (that is, equipment, supplies, and material) • Details the fundamental concepts of the receiving process

43. References • Records • FAR 52.245-1 (f) Contractor Plans and Systems (iii) Records of Government Property • FAR 52.245-1 (f) Contractor Plans and Systems (iii) Records of Government Property (A) (1) and (10) • FAR 52.245-1 (f) Contractor Plans and Systems (iii)(B) Use of Receipts & Issue System for Government Material

44. References • Records • E2604-09 ASTM Standard Practice for Data Characteristics of Equipment Records • Brockman, Cinda, White Paper on E2604-09 Standard Practice for Data Characteristics for Equipment Records, 11/11/11 • E2812-11 ASTM Standard Practice for Uniform Data Management in Asset Management Records Systems • Kriner, Brandon, White Paper E2812-11 Standard Practice for Uniform Data Management in Asset Management Records Systems, 11/10/2011

45. References • Records • ASTM E2499–06 Classification of Equipment Physical Location Information • NPMA Fundamentals of Property Management

46. Conclusion If you utilize the information provided, you should be able to establish procedures and records for Receiving and Identification in support of a government contract and Pass The Audit!

47. Contacts • Rosanne (Beth) Green, CPPM, CF • 321-751-9014 • Cell 561-252-5224 • bethivangreen@cfl.rr.com • Tara S. Miller, CPPM, CF, PMP Program Manager for ReDe/Critique • 321.867.8910 • Tara.s.miller@nasa.gov