Regulatory Outlook:Where we’ve been; where we’re going

Presented By:

Tom Ruckdaschel July 25, 2011

The information contained in this presentation represents only the personal views of the presenter and not necessarily those of the United States Government, DoD or DCMA. The information presented should not be construed as changing or modifying any statute, regulation, DoD or DCMA policy or guidance, or any term(s) of any contract with the United States Government or any department or agency of the United States Government. The information presented also does not affect in any way, any on-going or future property management system analysis

DCMA Mission

We provide contract administration services to the Department of Defense acquisition enterprise and its partners to ensure delivery of quality products and services to the warfighter; on time and on cost

Where DCMA Fits Under DoD

Under Secretaryof Defense

(Acquisition, Technology & Logistics)

ChairmanJoint Chief of Staff

ArmyNavy

Air ForceMarine Corps

Secretaryof

Defense

(Combat Support Agency)Assistant Secretary of Defense

(Acquisition)

OperationsDirectorate

InternationalDirectorate

Special Programs Directorate

Office of the Director

Human Capital

Directorate

Finance Business

OperationsDirectorate

Contracts Directorate

Engineering & Analysis Directorate

Quality Directorate

Portfolio Management & Integration Directorate

Information Technology Directorate

Chief of Staff

ReserveAffairs

CorporateSupport

Office of Independent Assessment

AircraftOperationsDirectorate

EEO

General Counsel

StrategicEffects

Eastern Region Western RegionCentral Region

PrimaryCMO

StreamlinedCMO

PrimaryCMO

StreamlinedCMO

PrimaryCMO

StreamlinedCMO

Strategic

Operational

Tactical

Organizational Structure

Our CONUS Presence

Western CMOsHeadquarters – Carson

•Denver•Boeing Huntington Beach•Lathrop•Lockheed Martin Denver•Boeing Long Beach•Los Angeles•Palmdale•Phoenix•Santa Ana•Lockheed Martin Sunnyvale•Raytheon Tucson•NPO

Central CMOsHeadquarters - Chicago

•Chicago•Dallas•Dayton•Detroit•Lockheed Martin Forth Worth•Bell Helicopter Forth Worth•Huntsville•Boeing St. Louis•Twin Cities•AMP•AIMO

Eastern CMOsHeadquarters - Boston

•Atlanta•Baltimore•Boston•Garden City•Hartford•Manassas•Lockheed Martin Marietta•Lockheed Martin Moorestown•Orlando•Philadelphia•Boeing Philadelphia•Sikorsky Aircraft•Springfield•Raytheon Tewksbury•APO•NSEO

Special Programs

•Special Programs East

•Special Programs South

•Special Programs West

Our International Presence

Our Core Functions

• Contract Management• Cost and Pricing• Property and Plant Clearance• Quality Assurance • Engineering and Analysis Support• Delivery Schedule Management• Earned Value Management• Contract Safety • Transportation

FAR 42.302(a)(b)

Property and Plant Clearance

• Four Business Areas:• Property Group(CONUS)• DCMA International (OCONUS)• Contingency Contracting (Iraq/Afghan)• Special Programs

• Ensure contractors meet FAR/DFARS requirements

• Provide effective and efficient oversight & surveillance (property audits)

• Perform reutilization screening (of excess property, as required) [Plant Clearance Group]

• Evaluate contractor reported property loss, damage, destruction, theft

Current Environment

• Government property management continues to evolve• Regulations, policies, standards, procedures• People (competencies, process analyses)• New DAU property course (IND 105)!• Technology

• Regulations (FAR/DFARS) have:• Refreshed• Transformed• Clarified; updated• Improved (and, yes, challenged)

• As 2012 approaches—• Most major “federal” regulatory changes appear complete• New (DoD) rules will seek to improve on established baselines

Observations

• Five year learning curve--beginning with FAR rule 2007 • Understanding the context

• Learning new language and requirements

• Negotiating• Revising procedures to conform

• Resolving• Resolving disputes/interpretation

• Settling down• Agreeing on new baselines

• Improving (moving forward)• Self assessments/new sense of audit protocols

We’re about here!

Observations (cont.)

• We’re now seeing different aspects of Govt property management melding together• Finance, logistics, property accountability• Sustained “thirst for information” from DoD Military

Services/DoD Components• DoD seeking common processes for obtaining standard data

• We see this in:• “Ask a Professor” responses: many “property” questions now

deal with “non” contract property issues; e.g., logistics, finance, UID, Govt property accountability

• New DAU course on GFP (CLC 051) revealed the integrated policy environment; e.g., GFP as it effects program managers, property administrators, and contracting officers

Today’s Regulatory Baseline

• Two property clauses published in the last five (5) years• 52.245-1 (June 2007)• 52.245-1 (August 2010)

• Both stem from the same major reform effort• Four new DFARS clauses now in place:

• 252.211-7007—Reporting GFE to the UID registry• 252.245-7001—Tagging, Labeling and Marking of GFP• 252.245-7002—Reporting Loss of Government Property• 252.245-7003—Contractor Property Management System

• Plus…Procedures, Guidance and Information 2010-001

Baseline (cont.)

• Four new property cases in play• FAR Case 2010-009• DFARS Case 2009-D008• DFARS Case 2009-D043 • DFARS Case 2010-D018

Overview: FAR Case 2010-009

• Proposed rule published April 4, 2011; public comment period ended June 5, 2011

• Major changes include:• New/revised definition of unit acquisition cost• Clarification of plant clearance policy• Revision of contractor scrap requirements; including deletion of

requirement for Govt approval of contractor scrap procedures• New/clarified policy on property abandonment• Revised Contracting Officer responsibilities—determine:

• Extent of contractor liability—based upon corresponding damages• Appropriate form and method of recovery, repair, replacement or

other restitution• Deposit of monies (from property loss)--U.S. Treasury unless

otherwise authorized by statute

DFARS Case 2009-D008

• Proposed rule published Dec. 3, 2010• Major change: establishes a

DFARS clause for property disposition/plant clearance

• Includes:• Requirement to use PCARSS• Clarified demil requirements (must be included in contract

terms and conditions) • New PGI for trade security control

clearances

• Plant Clearance Automated Reutilization and Screening System

• The “automated Inventory Schedule” [SF 1428]

• Deployment began in 1995• Used by most DoD

contractors

Quick Overview PCARSS

• DFARS Cases (cont.):• Case 2009-D043: Reporting GFP to the DoD Registry (GFP module)

• Revises current DFARS clause 252.211-7007• Status:

• Proposed Rule published Dec. 22, 2010 [cancelled]• New proposed rule will be published in 2011

• DFARS Case 2010-D018: Responsibility and Liability• Codifies Class Deviation 2010-O0003, Responsibility and Liability for Government Property• Consistent policy for contractor liability (for property loss); negotiated contracts awarded under competitive procedures • Status: Final Rule pending

• Review DFARS and FAR proposed and interim rules• Change Notices:

http://www.acq.osd.mil/dpap/dars/change_notices.html• Submission input of public comments:

http://www.acq.osd.mil/dpap/dars/out_for_public_comment.html

View public comments on proposed & interim rules• DFARS rules:

http://www.acq.osd.mil/dpap/dars/out_for_public_comment.html• FAR rules: www.regulations.gov

• View status of open cases• DFARS rules: http://www.acq.osd.mil/dpap/dars/case_status.html• FAR rules: http://www.acq.osd.mil/dpap/dars/far_case_status.html

Useful Information

Any Questions?

email tom.ruckdaschel@dcma.milTelephone (804) 734-0505

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BACK UP

Procedures, Guidance & Information

• PGI Case 2010-P001 (245)• Published July 23, 2010• First PGI for Contracting

Officers involving Government Property

• Provides Guidance on:• Furnishing GP• Documentation• Transfers of Acct.• Attachments to solicitations and

awards• Title & Disposition

NEW!

PGI (cont.)

• A companion resource to the DFARS that contains:

mandatory and non-mandatory internal DoD procedures

non-mandatory guidance

Supplemental information

Why a PGI?

• Poor/no implementation of 2007 FAR Part 45 & clause changes• Noncompliance with FAR 45.102(b)• Not obtaining Property Management Plan• Not providing property lists to offerors with required data

• Growing number of audit findings • Get GP right…on the contract• Provide guidance on delivery of CAP

• Furnishing GP (PGI 245.103-70)• Responsibility: Requiring Activity (as a

part of acquisition planning under FAR Part 7)

• Building a business case under FAR Part 45.102:• Element 1: Government’s best interest;• Element 2: Overall benefit to the acquisition;• Element 3: Government’s assumption risk;• Element 4: Requirement cannot otherwise be met

Overview of PGI 2010-001

• Element 1• In the Government’s best interest

• Discussion should be specific & factual• Actual or projected dollars should be addressed

• Discussion should address the following:• Economy – achieves lowest cost or price objective• Standardization – critical need for precise replication• Security – needed for national security reasons• Expedite production – achieving timely delivery• Scarcity – Government is the only source• Maintain the Industrial base – ensure future capability• Contract type – potential for a more favorable contract

Overview (cont.)

• Element 2• Overall benefit to the acquisition must significantly

outweigh the costs of administration• Property in the hands of contractors drives program

costs• Controlling• Managing• Disposal

• Costs must be either less than what the contractor might otherwise incur; or benefit to the Government must outweigh additional costs

Overview (cont.)

• Element 3• Government’s assumption risk• Risk analysis must demonstrate that the Government

is not substantially increasing its risk• Risks must be considered, discussed and

documented

Overview (cont.)

• Element 4• Government requirements cannot otherwise be met• Is the Government property being provided critical

and significant to meeting acquisition plan objectives

Overview (cont.)