Earlier this month, the DoD Inspector General’s Office released a report that found the F-35 Joint Program Office has not adequately tracked the government furnished property (GFP) used to build the fighter jets.
Specifically the report found: “DoD officials did not account for and manage F‑35 Program Government property, including recording the property in an accountable property system of record (APSR), as required. The only record of Government property for the F‑35 Program is with the contractor and its subcontractor, which valued the 3.45 million pieces of property at $2.1 billion.”
F-35 Government Property Management
The F-35 Program did not hold officials responsible, to account for and manage this Government property for more than 16 years. The F-35 Program did not properly report the assets to the APSR, or follow the procedures to maintain Government property records.
As a result, the DoD does not know the actual value of the government property associated with the F‑35 Program.
“Without accurate records, the F‑35 Program officials have no visibility over the property and have no metrics to hold the prime contractor accountable for how it manages Government property. The lack of asset visibility restricts the DoD’s ability to conduct the necessary checks and balances that ensure the prime contractor is managing and spending F‑35 Program funds in the Government’s best interest and could impact the DoD’s ability to meet its operational readiness goals for the F‑35 aircraft.”
Unfortunately, this report could affect the future of the F-35 Program. To this point, the Inspector General has laid out specific action items that need to be addressed before construction of the fighter jet ramps up to full speed. Mainly, this list includes properly managing and accounting for F-35 property and executing a complete inventory of all government property by the end of December 2019.
What this means for Defense Contractors
This report is attracting a fair amount of attention in the news and should be considered a wake-up call for all Government Contractors, especially those who are managing GFP and CAP.
The Pentagon is becoming increasingly serious about Accountability and Audit Readiness. Contractors need to maintain an asset management system to support these obligations for accurate inventory management and government reporting.
The Defense Industry has been carefully watching the FIAR Initiative (Financial Improvement and Audit Readiness Directorate) and the Defense Audit findings to gain insights and develop strategies on how to navigate this new landscape.
To learn more about the FIAR Initiative and the impact of the Defense Audits:
Download our 2019 Guide to Audit Readiness
Contractors are aware that maintaining compliance to their contracts is critical; but until now, there has been some question as to what extent they will be held accountable.
This is a warning shot across the bow of the Defense Industry.
The Pentagon is effectively communicating that the entire Defense Industry, including the branches of the DoD and the contractors who support them, need to tighten up their asset management and reporting of government property.
The Essential Property Management Guide
Managing Government Property has never been easy and is only getting more difficult in the current climate.
Understanding and following Federal regulations requires immense amounts of knowledge and dedication. Rules and regulations need to be understood from the beginning so that preparations can be made and systems put in place to maintain compliance throughout the contract.
In this free guide, we provide detailed information about the rules and regulations that are common and apply to most Defense contractors.
Property managers and administrators will understand more about the following regulations:
- Federal Acquisition Regulation (FAR)
- Defense Federal Acquisition Regulation Supplement (DFARS)
- DoD Instructions
- DoD Procedures, Guidance and Information (PGI)
This guide also explains how A2B Tracking supports property management by making sense of these contract obligations. A2B Tracking simplifies these challenges by developing a Government Property Management system called UC! Web that was specifically designed for US Military standards for asset identification (IUID and RFID) and integrates seamlessly with WAWF, IUID Registry and PCARSS.
