Redstone Government Consulting Blog | Jonas Clem

So, the title is maybe a little misleading, and don’t worry – DCMA won’t let you forget the Government property during contract closure. Government property closeouts are only a singular piece to the contract closeout process. And like with all things Government property, the closeout process takes teamwork from both the contractor side and the Government side to be successful.

Last year, we wrote about the Department of Defense (DoD) proposing a change to the Defense Federal Acquisition Regulation Supplement (DFARS) that would possibly simplify Government property clauses by consolidating four clauses into a single management clause. This became a reality in December 2023 when the DoD issued a final rule consolidating the four clauses into DFARS 252.245-7005, Management and Reporting of Government Property. The new clause had an effective date of January 22, 2024.

We have discussed recently how DoD has an increased interest in government property, especially the property that contractor’s control and maintain. RGCI has helped clients with government property issues more in the past four years than the previous ten years combined.

The Department of Defense is proposing a change to the Defense Federal Acquisition Regulation Supplement (DFARS) that would consolidate four existing Government property clauses into a single clause. The requirements of the four clauses are not going away but are being simplified to help both contractors and Government personnel in dealing with the requirements of Government property, in particular Government-Furnished property (GFP).

The Department of Defense has failed an audit - five in a row, to be exact. Federal law mandates audits for all federal agencies, and until 2017, the Department of Defense was never able to satisfy this requirement. It is a very tall task – auditing an agency that controls over half of the discretionary spending in the United States. But in 2017, DoD underwent a financial audit for the first time. They did not pass, but that was never expected. There have also been audits each year since, and while the Agency has not yet passed an audit, it has improved each time.

Well, here we are again – at the end of another year. And while we are busy here at RGCI helping clients with everything from closing out 2021 books to budgeting for 2022, we pause to look back and give thanks for another year. At RGCI, we have had more babies born this year, more of our kids graduate high school or college, and more weddings. We have enjoyed these moments with our clients also. Yes, you talk to someone 1-2 times a week, and you get to know them very fast. We are so thankful for all we have been blessed with in 2021.

For many contractors (truly, for any business), any event with the word “Audit” in the name has a scary connotation. And when you add DCAA to that, a contractor’s blood pressure may automatically rise. However, the best way to rock an audit is to understand what it is for and be prepared for it.

A Government Property Management System Analysis (PMSA) can be a contractor’s first experience with Defense Contract Management Agency (DCMA). This video and article explain what to expect for a Government contractor’s initial PMSA – commonly known as a Government property audit. Join Jonas Clem as he discusses the essential aspects of a contractor’s first PMSA.

We get lots of questions about Government property and how it should be handled with subcontractors. Remember, and it has been said over and over, the prime contractor is responsible for just about anything subcontractors do in support of a contract. And yes, that includes Government property requirements.

You now understand a little bit more about provisional billing rates from our first of this two-part series. In this second part of our coverage of provisional billing rates, we delve a little deeper into the purpose behind provisional billing rates as well as how to prepare them and the differences between provisional billing rates and proposal bid rates. Knowing these details will enable you to prepare an accurate DCAA submission.