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The overlooked acquisition problem

Government property is an important issue that is not getting much attention.

Jan. 20, 2014 - 06:00AM   |  
By MICHAEL P. FISCHETTI   |   Comments
Michael P. Fischetti, J.D, CPCM, is executive director of the National Contract Management Association, with membership comprising 115 chapters worldwide. Previously, he was the acquisition executive and head of contracting activity for the Defense Department's Military Healthcare System. Fischetti has more than 30 years of leadership, operations and policy experience across multiple government, civilian and industry sectors.
Michael P. Fischetti, J.D, CPCM, is executive director of the National Contract Management Association, with membership comprising 115 chapters worldwide. Previously, he was the acquisition executive and head of contracting activity for the Defense Department's Military Healthcare System. Fischetti has more than 30 years of leadership, operations and policy experience across multiple government, civilian and industry sectors. ()

The government and industry’s contractual responsibilities pertaining to accounting, maintaining, inspecting, transporting, reporting, evaluating, storing, utilization, abandoning and disposal of government property seems like a mundane subject. However, it is actually an important issue, and one that is being overlooked as other concerns get more attention recently.

In the olden days, most property used in the performance of government contracts was owned by the government and furnished to the contractor from government owned warehouses (depots). Contracts would state the equipment to be provided, the state of its usability, its estimated value, and where and when it would be provided to support performance.

Things have become much more complicated since then and responsibilities somewhat diffused. There once was a robust profession providing technical expertise to manage these assets, which the program manager and contracting officer could rely on to make good management decisions and meet contractual commitments. There is an entire regulation (the Federal Property Management Regulation (FPMR)) and FAR Part (45) devoted to this subject. A recent cover story in The Economist concerned how agencies can better leverage their property assets to assist with budget balancing and debt reduction

Unfortunately, many government property experts were streamlined out of existence, along with logisticians, cost and price analysts, quality assurance specialists and other in-house acquisition expertise, in order to save money and reduce “bureaucracy.” Additionally, property depots and their management have moved from being government owned and operated to various combinations of government and commercial ownership and operation. After many years of war, bringing home equipment is proving to be a challenge. Who owns the equipment? Where is it? What state of repair or disposal is it in? Who pays to fix it? Who and how does it get returned home? Who make the decision and based on what criteria?

The involvement and trend of contractors working closer to, if not directly on, the battlefield has made contractual responsibilities more complicated just when the expertise to properly manage those responsibilities has become more scarce and the appreciation of and need for those talents has increased. Along with higher dependence of the government on contractors to satisfy most core missions and service provision, commercial or more traditional government contractors now directly operate many logistical activities. There is a reason government property managers were once more numerous in number and experience, and valuable to the taxpayer. Citizens may now have to pay much more for this expertise than they would have had that core competency been better maintained in the first place.

It is important to maintain a proper pipeline of new property specialists so that when the former government experts that now work as contractor employees are no longer around, someone can take their place. Property management is another expertise today’s contracting managers must understand in order to best protect their company or agency’s interest. FAR Part 45 doesn’t get as much attention as Part 15 (Source Selection strategies, such as LPTA), but perhaps it should.

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