Government Furnished Property Gotchas

Government furnished property can be a headache, even for the most seasoned contractor. It can include thousands of tiny parts, multi-million-dollar pieces of equipment or both – often all on one contract in an old dark government building. We have identified some common, and not-so-common, areas we see missing in contractor government property management plans.

Train Your Personnel

All personnel having anything to do with government property should be trained on your policies and procedures. It’s also important to make sure that your government property plan addresses all personnel involved with government property. All too often, we see plans that will only mention the 2-3 positions that are obvious to a contractor’s property plan. Sure, we know your property administrator, purchasing manager and receiving personnel are involved; what about your program managers or site coordinators?

Keep Your Policies Up-To-Date

Be specific concerning your internal audits in your policies. When are self-assessments? What sampling methods are used? What confidence level is accepted? How are findings & discrepancies handled? And keep in mind, even though the government may not formally request the results of your internal audits or self-assessments, it is still a requirement for the contractor to provide them per the FAR.

Understand “Loss” of Government Property

The FAR definition of “loss of government property” includes loss, damage, destruction and theft. In your policy or plan, make sure you are specific with your timeframe on reporting lost property. Many plans will state something to the effect of “we will immediately notify the property administrator”. The government likes specific time frames – ten minutes, thirty minutes, one hour……and so on. All time references should be specific – so they can be audited.

Remember to have a policy/procedure for finding an item that was “lost.” All data elements required to be on a property record are also required to be on a loss report. Use FAR 52.245-1 (f)(1)(iiv).

Clearly Segregate Identification and Classification

Both are plan requirements and MUST occur at the time of receipt.

• Identification refers to the marking placed on an item to identify it as government property.
• Classification means you should determine which of the four government property categories the item belongs in: equipment, material, special tooling, special test equipment.

Identify Subcontractor Control

Watch those flow-down clauses; It is not appropriate to flow down FAR 52.245-1 entirely. The clause applies to the government and is a guide for a prime contractor’s procedures. If your sub is following the FAR clause, as an example, it directs them to report directly to DCMA and not the prime.

Further, as a prime contractor, make sure you have a specific audit plan for any subcontractor possessing government furnished property.

Let Redstone Assist You with Your Property Control System

At Redstone Government Consulting, our objective is to ensure your company has a property control system which is transparent and accountable for all government property in your possession. Our professionals can help you design and implement a new system or update an existing one. We can help ensure your government property system provides the required controls necessary for receipt, acquisition, accountability, and management of government property.