Have you read the Defense Contract Management Agency (DCMA) guidebook on methodology and analysis techniques for government contractor property management oversight? Surprisingly, many people responsible for maintaining compliance for government property management say “no.” This article explains the importance of this valuable resource. Its the eQuip’s team opinion that EVERY defense contractor responsible for government property management should read and incorporate the DCMA guidebook into their compliance approach.
Who Is The Defense Contract Management Agency (DCMA)?
The DCMA works on behalf of the U.S. Department of Defense (DoD) and other federal agencies to aid in the acquisition of products and services. They play a critical role in ensuring the government gets a fair cost during procurement, receives what they expect during delivery, and continues to get value during sustainment. The DCMA oversees 225,000 government contracts that have a combined value greater than $3.5 trillion. Currently over 10% of all DoD owned property is in the custody of defense contractors to enable performance of their contracts. This equates to over $114 billion worth of property purchased with taxpayer money that is controlled by defense contractors. It is tasked with ensuring contractors safeguard that property and use it responsibly.
What Is The DCMA Guidebook For Government Contract Property Administration?
The DCMA employs Property Administrators (PA), Industrial Property Management Specialists (IPMS), and other personnel to oversee contractors with government property. When a contract includes DFARS 252.245-7003, the DCMA has the authority to review your property management system to ensure compliance with FAR and DFAR requirements (most notably, FAR 52.245-1). The DCMA can review your government property management activities from the point of contract award, fulfillment, and closeout. The DCMA Guidebook for Government Contract Property Administration details the processes they will use. Particularly, it explains how they complete initial reviews for new contract awardees and how they should perform a property management system analysis (PMSA, this is sometimes referred to as a “government property audit”).
Brief History Of The Government Furnished Property (GFP) Guidebook
The GFP Guidebook has evolved over many years. One of the first versions, written in 2014, can still be found on the DoD Procurement Toolbox website. That edition was about 30 pages, but in 2020 the DCMA released a version that swelled the file to over 120 pages. When the DCMA version of the Government Property Guidebook was released, many leaders of the Defense Industrial Base (DIB) expressed concerns that the contents conflicted with regulatory requirements and contract terms. Members of the National Defense Industrial Association (NDIA) government property systems committee formalized concerns into letters and meetings with leaders in the DCMA. They felt language directing contractors to perform certain tasks and actions (e.g., contractors must/should/shall) were inappropriate for a guidebook. Furthermore, they took issue with the DCMA’s decision to post the guidebook without the Department of Defense-level approval as required by the Defense Federal Acquisition Regulation Supplement (DFARS) 201.304(1)(i).
In response to these concerns, Lt. Gen. David G. Bassett, Director of the DCMA, addressed a letter (see below) to the President of the National Defense Industrial Association (NDIA) – Retired General Mr. Hebert J. Carlisle -, he rejects the Associations assertion that the Guidebook inappropriately creates additional property management regulation outside of the rulemaking process. Lt. Gen Basset states “The DCMA respectfully disagrees with the NDIA’s characterization that the Guidebook constitutes the issuance of a “quasi” regulatory rule. Here, the Guidebook was specifically written for the purpose of providing internal direction to the DCMA’s property professionals, and it does not impose any new or additional contract compliance requirements on industry contractors.”
Nevertheless, the DCMA was compelled to create and release an updated version of the DCMA Government Property Guidebook. In August of 2022, only two years after the previous publication, the DCMA published “Rev2”. The DCMA summarized the changes occurring in Revision 2 as follows:
- Provides clarification that the presence of Government property qualifies as a high-risk condition for workload acceptance. As such, the DCMA will accept contracts that are considered mission work, regardless of the dollar value of the contract, if there is a requirement for Government property.
- Adds references to templates created since the last revision of this Guidebook.
- Provides updated guidance regarding the level of detail expected in PMSA reports to the ACO. These changes have eliminated the need for the Government Contract Property Group PMSA Panel process.
- Added processes designed to provide a clean audit trail for those transactions that are to be tested under upcoming Financial Improvement and Audit Remediation (FIAR) testing.
- Removed references to the Property Loss eTool, which has been decommissioned.
- Provides an updated interpretation of the loss reporting requirement in cases where it is unknown whether the contractor will be reimbursed for a government property loss.
- Removed some background information to streamline Chapter 2.
- Provides additional clarification on the treatment of contract property that a contractor sends to another corporate division.
Highlights Of The Guidebook
It is understandable that some aspects of the Guidebook concern defense property contractors, but overall having this information publicly available should be welcomed. This is the DCMA’s “playbook” on their oversight process and compliance investigation methods. Everyone from those new to government property to the most experienced can gain insights on how to strengthen their procedures to become “PMSA proof” and what their accountable property system of record (APSR) must be able to demonstrate to confirm compliance.
The Guidebook helpfully lists the property related FAR and DFARS clauses that could be present in a contract. Their process for new contract review is also included and each of the 22 PMSA elements has its own section. Within each section it explains which part of the FAR 52.245-1 is relevant to the PMSA element, a summary of what should be evaluated, the objective of the review task, the scope of the analysis activity, which documents are relevant, sampling and testing considerations, and how to document noncompliance in the audit report.
To be fully prepared for government property management success, you must review and incorporate the DCMA Guidebook for Government Property Administration into your compliance plan.