IG-00-054

AUDIT

REPORT PROPERTY ADMINISTRATION DELEGATIONS FOR

CONTRACTOR-HELD PROPERTY

September 27, 2000

National Aeronautics and

Space Administration

OFFICE OF INSPECTOR GENERAL
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Acronyms

DOD Department of Defense

DCMA Defense Contract Management Agency

FAR Federal Acquisition Regulation

IPO Industrial Property Officer

ONR Office of Naval Research

NPD NASA Policy Directive

NPG NASA Policy Guidance
W September 27, 2000

TO: A/Administrator

FROM: W/Inspector General

SUBJECT: INFORMATION: Property Administration Delegations for Contractor-Held

Property

Report Number IG-00-054

The NASA Office of Inspector General (OIG) is conducting an audit of NASA and delegated

Agency management of contractor-held property. During the audit, we determined that controls

for delegating property oversight responsibility could be improved. For example, property

administration delegations were not completed for 10 contracts with more than $12 million in

contractor-held property. In addition, delegation issues were not resolved between Johnson

Space Center (Johnson) and Kennedy Space Center (Kennedy) for three contracts with more

than $1.9 billion in contractor-held property. Consequently, neither Center is performing the

property administration oversight for this property. As a result, NASA is not assured that these

resources are used and safeguarded in accordance with the contract's terms and conditions.

Background

NASA provides Government property, referred to as contractor-held property, to its

contractors. While NASA has overall responsibility for this property, the Agency can either

retain property administration oversight or delegate this function to the Defense Contract

Management Agency (DCMA). NASA's policy is to delegate property administration for offsite contractors and retain property administration for on-site contractors. One of the critical

oversight functions is the analysis of the contractor's property management system. It is through

this analysis that property administrators determine whether the contractor is complying with the

contract terms and conditions regarding property. The analysis results in a report that is

provided to the contracting officer.

Recommendation

We recommended that the Associate Administrator for Procurement instruct Procurement

officials at Johnson and Marshall Space Flight Center (Marshall) to issue delegation letters to

DCMA and obtain acceptance, modification, or rejection of those delegations for the 10

contracts noted earlier. We also recommended that the Associate Administrator for

Procurement strengthen controls to ensure that NASA complies with Federal Acquisition
Regulation (FAR) and NASA FAR Supplement regulations that address property

administration. We further recommended that Center Directors at Johnson and Marshall ensure

that contracting officers comply with the FAR and the NASA FAR Supplement pertaining to

property administration. Also, we recommended that Center Directors at Johnson and

Kennedy complete the property delegation for the three contracts noted earlier.

Management Response and OIG Evaluation

Management concurred with our recommendations. The complete text of management's

response is in Appendix F. Management, however, is not fully responsive to our

recommendation to issue delegation letters to DCMA for the ten contracts noted earlier.

Management stated that delegations were not needed for six of the ten contracts because the

contracting officer retained the property administration responsibility. This property is not

located at NASA Centers. NASA's policy is to delegate property administration for property

that is not located at NASA Centers. Accordingly, property administration should be delegated

for those contracts. We request that management provide additional comments explaining the

reasons for not following the policy. Management fully concurred with our recommendation to

strengthen administrative controls to ensure compliance with the FAR and NASA FAR

Supplement. Management also fully concurred with our recommendation to instruct the

Johnson and Marshall Center Directors to ensure that contracting officers comply with the FAR

and NASA FAR Supplement pertaining to property administration. Management provided

corrective actions along with closure dates for these recommendations. The planned corrective

actions, such as assessing regulatory efficacy and issuing guidance, address the intent of our

recommendations. While management concurred with the recommendation to resolve the

property administration issue at Kennedy, it did not provide a completion date. Completion

includes accepting the delegation and providing adequate resources to perform the contractor

oversight. Therefore, we request that management provide a completion date in response to the

final report.

Details on the status of the recommendations are in the finding section of the report.

[Original signed by]

Roberta L. Gross

Enclosure

Final Report on Audit of Property Administration

 Delegations for Contractor-Held Property
PROPERTY FINAL REPORT

ADMINISTRATION

DELEGATIONS FOR CONTRACTOR-HELD PROPERTY
W September 27, 2000

TO: H/Associate Administrator for Office of Procurement

M/Associate Administrator for Space Flight

AA/Director, Lyndon B. Johnson Space Center

AA/Director, John F. Kennedy Space Center

DA01/Director, George C. Marshall Space Center

FROM: W/Assistant Inspector General for Auditing

SUBJECT: Final Report on Audit of Property Administration Delegations for ContractorHeld Property

Assignment Number A0000700

Report Number IG-00-054

The subject final report is provided for your use and comments. Please refer to the Executive

Summary for the overall audit results. Our evaluation of your response is incorporated into the

body of the report. We request that management reconsider its position not to delegate

property administration on selected contracts for which property is located off NASA Centers

as set forth in the report and provide its comments in writing by November 27, 2000. The

corrective actions planned for recommendations 2 and 3 were responsive. The planned

management's actions, if implemented, will be sufficient to close recommendations 2 and 3. We

request additional information for recommendation 4 as described in the report. All

recommendations will remain open until the above actions are taken.

If you have questions concerning the report, please contact Mr. Daniel Samoviski, Program

Director, Earth and Space Science Audits, at (301) 286-6890, or Mr. Larry J. Timmons,

Auditor-in-Charge, at (321) 867-4705. We appreciate the courtesies extended to the audit

staff. The final report distribution is in Appendix G.

[Original signed by]

Russell A. Rau

Enclosure
2

cc:

B/Chief Financial Officer

B/Comptroller

BF/Director, Financial Management Division

G/General Counsel

JM/Acting Director, Management Assessment Division
Contents

Executive Summary, i

Introduction, 1

Finding and Recommendations, 2

Property Administration Functions

Appendix A - Objectives, Scope, and Methodology, 8

Appendix B - FAR and NASA Far Supplement Guidance, 10

Appendix C - Property Management Functions, 11

Appendix D - Property Management System Analysis Elements, 13

Appendix E - Contracts Without Completed Contract Delegations, 14

Appendix F - Management's Response, 15

Appendix G - Report Distribution, 22
NASA Office of Inspector General

IG-00-054 September 27, 2000

 A0000700

Property Administration Delegations for

Contractor-Held Property

Executive Summary

Background. NASA accomplishes much of its mission through the use of contractors. The

Agency often provides its contractors Government-furnished property, or the contractors

acquire property using NASA funds.1 In either case, NASA often retains title or ownership of

the property while it is in the custody of contractors. Contractors are required to manage and

account for NASA property in accordance with the FAR and the NASA FAR Supplement as

well as other directives and contractual requirements. To ensure they comply with these

requirements, contractors develop and maintain property management systems.

While NASA has overall responsibility for oversight of contractors' property management

systems, the Agency normally delegates this responsibility to either the DCMA or the Office of

Naval Research (ONR). NASA retains responsibility for contractors located on or near

NASA Centers, depending on the Center's guidelines. The NASA Industrial Property Officer

(IPO) has overall responsibility for contractor oversight, while NASA property administrators

are responsible for detailed oversight of the contractors' property management system.

Objective. The overall audit objective is to determine whether NASA and its delegated

agencies appropriately manage Government property held by contractors. This report identifies

conditions regarding property administration delegations. We will address the overall objective

in future reviews. Details on the objective, scope, and methodology are in Appendix A.

Results of Audit. While property delegations were properly completed at Goddard Space

Flight Center, property delegations were not properly completed or resolved in all instances at

other NASA Centers. Specifically, NASA contracting officers at Marshall and Johnson did not

formally delegate or DCMA did not acknowledge receipt of property administration

responsibilities, for 10 contracts with contractor-held property totaling $12 million. Also, the

IPO at Kennedy did not accept property administration delegations for three Johnson contracts

with contractor-held property at Kennedy valued at more than

$1.8 billion. Consequently, property administrators did not perform any property

 

1

 This property is referred to as contractor-held property throughout the report.
ii

administration functions for these contracts. Accordingly, NASA is not assured that its

resources, in the possession of contractors, are being utilized and safeguarded consistent with

the contract's terms and conditions.

Recommendations. We recommended that management instruct the appropriate contracting

officers to delegate property administration to the DCMA and ensure that DCMA accepts,

modifies, or rejects the delegation for the identified contracts. Also, management should

strengthen administrative controls to ensure that the Agency is in compliance with the FAR and

the NASA FAR Supplement regulations that address property administration. Lastly,

management should resolve the property administration issue for the Johnson property located

at Kennedy.

Management's Response and Evaluation of Response

Management's Response. Management concurred with our recommendations. While

management agreed to issue delegation letters for four contracts, they stated that six of the

contracts should not be delegated to DCMA because the contracting officer retained property

administration oversight. NASA also agreed to review pertinent NASA FAR Supplement

regulations and determine whether the regulations should be strengthened. NASA further

agreed to remind contracting officers of the need for delegating property administration functions

when appropriate. NASA stated it would resolve the property administration issue for the

Johnson property located at Kennedy. The complete text of the response is in Appendix F.

Evaluation of Response. While management concurred in principle with each

recommendation, we request that management reconsider its position on our recommendation

to issue delegation letters to DCMA and provide additional comments. We have also asked

management to provide a completion date relating to our recommendation to resolve the

Kennedy delegation issue. Management is not fully responsive to our recommendation to issue

delegation letters to DCMA. Management stated that property delegations were unnecessary

for six contracts because the contracting officer retained this function. This property, however,

is not located at NASA Centers. Management's position does not agree with their stated policy

of delegating property oversight to DCMA for off-site property. Accordingly, we request that

they reconsider their position. Management concurred with our recommendation to strengthen

FAR and NASA FAR Supplement controls. Management also concurred with our

recommendation to ensure that contracting officers at Johnson and Marshall comply with FAR

and NASA FAR Supplement regulations governing property administration. All

recommendations will remain open until all corrective actions have been taken.
Introduction

The FAR and NASA FAR Supplement provide guidance and direction to NASA contracting

officers for delegating contract administration services, such as property administration. These

requirements are set forth in FAR Subpart 42.2, "Contract Administration Services," and

NASA FAR Supplement Part 1842, "Contract Administration and Audit Services."

NASA may delegate responsibility to oversee a contractor's property management system to

DCMA or ONR. The DCMA oversees for-profit contractors, while the ONR oversees nonprofit and educational organizations. NASA retains oversight responsibility for contractors

located on or near NASA Centers depending on a Center's guidelines. NASA property

administrators oversee contractor's property management systems under the direction of an

IPO.

The FAR and NASA FAR Supplement also provide guidance and direction to contractors who

manage and account for property either provided to them by NASA or acquired using

Government funds. These requirements are set forth in FAR Part 45, "Government Property,"

and NASA FAR Supplement Part 1845, "Government Property." Contractors may also have

to comply with other property management directives if the contracting officers include these

requirements in the contract. For example, NASA may include NPG 4300.1, "NASA Personal

Property Disposal Procedures and Guidelines," in contracts that involve NASA property.

Contractors develop property management systems to ensure that they comply with these

requirements.
2

Finding and Recommendations

Property Administration Functions

NASA contracting officers at Johnson and Marshall did not issue property administration

delegations or ensure that DCMA properly acknowledged acceptance, modification, or

rejection of the delegations for 10 contracts as required by the FAR and NASA FAR

Supplement. In addition, the Kennedy IPO did not accept property administration delegations

for three other Johnson contracts. Contracting officers could not provide reasons for the lack of

delegations and the lack of DCMA acknowledgement of the delegations. The Kennedy IPO,

however, stated that resource limitations prevented acceptance of the Johnson delegation.

Consequently, property administration functions have not been performed, resulting in NASA's

lack of assurance that more than $1.9 billion in contractor-held property is managed

appropriately. 

Requirements and Guidance for Property Administration Delegation

The FAR and NASA FAR Supplement contain requirements and guidance on contract

administration that includes property administration. NASA can either retain the property

administration function or delegate it to the DCMA. The process begins with the NASA

contracting officer issuing the delegation on NASA Form 1430, "Letter of Contract

Administration Delegation, General." Property administrators can accept, modify, or reject the

delegation. Acceptance is evidenced on NASA Form 1431, Letter of Acceptance of Contract

Administration Delegation." Further information on property administration requirements and

guidance is in Appendix B.

When overseeing a contractor's property management system, DCMA and NASA personnel

must follow the Department of Defense (DOD) guidance in DOD 4161.2-M, "DOD Manual

for the Performance of Contract Property Administration" (DOD Manual). The purpose of

property administration, according to the DOD Manual, is to attain efficient, economic, and

uniform management of contractor-held property. The manual identifies 23 functions, as shown

in Appendix C, that property administrators must perform.

A critical property management function is the annual analysis of the contractor's property

management system. The analysis includes 15 elements, which are described in Appendix D.

The purpose of the analysis is to ensure uniformity and consistency in the administration of

contract provisions relating to Government property in the custody of contractors. The DOD

Manual specifies the levels of analysis, sampling plans and techniques, planning, and reporting

that the property administrator must use. It is through performing this analysis that property

administrators determine whether contractors are complying with contract terms and conditions

regarding property. The property administrator's analysis results in an annual report submitted
3

to the contracting officer for use in assessing whether a contractor complied with contract terms

and conditions.

Compliance with Property Administration Delegation Requirements and Guidance

We reviewed contract files for 119 contracts with contractor-held property totaling $11 billion

at 4 NASA Centers to determine whether property administration delegation requirements and

guidance were followed. For 10 contracts with more than $12 million in contractor-held

property, Marshall and Johnson contracting officers did not issue property administration

delegations and, in some cases, DCMA did not acknowledge that it accepted, modified, or

rejected the delegation. We interviewed contracting officers, property administrators, and IPOs

at Johnson and Marshall to determine why delegation requirements were not being met. The

interviewed personnel could not explain why property administration was not delegated or

accepted, modified, or rejected by DCMA.

Johnson Request for Property Administrative Services

The Johnson IPO appropriately requested that the Kennedy IPO perform contract property

administration services for three contracts with more than $1.8 billion in contractor-held

property located at Kennedy. The Johnson IPO used NASA Forms 1430 and 1431 when

requesting the services. The requests complied with NASA FAR Supplement Subpart

1845.7209, which states that contractor-held property may be located at an alternate or

different location from the prime contractor. In those cases, the IPO at the prime contractor's

location will determine whether property administration is needed at the alternate location. If the

IPO determines that property administration is needed, then the IPO will request the alternate

location IPO to perform the services.

The Kennedy IPO stated that resource limitations prevented acceptance of the Johnson

requests for property delegation. The resource limitations are evidenced by a recent

reorganization at Kennedy, which reduced the number of property administrators from four to

three thereby reducing the Center's ability to manage contractor-held property.

Performance of Property Administration Functions

The 13 contracts (see Appendix E) for which property administration functions are not being

performed totaled more than $1.9 billion. If property administration services are not performed,

then serious consequences can occur. For example, one of the functions listed in the DOD

manual is the annual analysis of the contractor's property management system. If the analysis is

not performed, then NASA cannot rely on a contractor's property system. It is through the

analysis that the property administrator determines whether the contractor is effectively and

efficiently complying with the terms and conditions of the contract. The system analysis may

identify unsatisfactory conditions, such as inadequate controls for safeguarding Government
4

property. These unsatisfactory conditions may, in turn, lead to the disapproval of the

contractor's property control system and a subsequent increase in the contractor's liability for

the loss, damage, or destruction of Government property. Because the property administration

functions were not performed, NASA cannot be assured that its Government resources, in the

possession of contractors, are being utilized consistent with the intent of the contract's terms and

conditions.

The lack of acceptance of property administration responsibilities by the Kennedy IPO is in

need of immediate attention because of the value and sensitivity of the property in question.

Kennedy and Johnson need to resolve this issue quickly to ensure that the contractors are

following contract terms and conditions and that contracting officials are advised of property

administration deficiencies. NASA FAR Supplement 1842.202 requires that the delegation be

accepted, modified, or rejected on NASA Form 1431.

Control Improvements Needed.

The Agency should establish a milestone date for delegating contract administration functions,

such as property administration. Contract administration delegations are evidenced on the

"Checklist for Contract Award File Content" document, which is included in contract award

files. The control would help to ensure that contract administration delegations are made and

completed by the contracting officer or his representative in a timely manner.

In addition, the Agency should strengthen contract administration controls to ensure that

contracting officers receive property administration reports. For example, the controls should

ensure that property administration reports are received annually or that the contracting officer is

formally advised as to why it was not received. Such controls would result in assurance that

contract provisions are properly administered and those contracting officials are advised of any

contractor property administration deficiencies.

Conclusion

In some instances, contracting officers are not delegating property administration to DCMA

property administrators as required by the FAR or NASA FAR Supplement. Also, NASA

contracting and property officials have not ensured that DCMA acknowledged receipt and

acceptance of delegations. If property administration functions are not performed, then NASA

has reduced assurance that contractor-held property is managed appropriately.

Recommendations, Management's Response, and Evaluation of

Response
5

1. The Associate Administrator for Procurement should instruct the Johnson Director

of the Procurement Directorate and the Marshall Director of the Procurement

Office to direct their respective contracting officers to immediately issue

delegation letters to DCMA for those contracts that have not been delegated and

to obtain acceptance, modification, or rejection for those contracts for which the

DCMA has not responded to the delegation request.

Management's Response. Concur. The Associate Administrator for Procurement

(Associate Administrator) contacted the respective contracting officers at Johnson and Marshall

to ensure that delegations will be issued and acceptances obtained where necessary.

The Associate Administrator stated that Johnson has taken appropriate action for two contracts

listed in the report. The contracting officer submitted the property administration delegation for

the Canadian Commercial Corporation (NAS9-19569). The IPO has oral confirmation that it

has been received and will be accepted. The contracting officer and IPO are awaiting

acceptance. The contracting officer sent a delegation request to DCMA for Honeywell, Inc.

(NAS9-19605). The contracting officer will follow up to ensure a written acceptance is

received.

The Associate Administrator further stated that the Marshall Procurement Office has taken

appropriate action for those contracts listed in the report. Delegations were not made for six

Small Business Innovative Research Phase II type contracts. The Associate Administrator

stated these contracts are part of a continuous improvement initiative aimed at streamlining

property administration for small, short-duration contracts, which involve no contractor-held

property. Accordingly, the contracting officers retained property administration for these

contracts. However, the Associate Administrator stated that property delegations were made

for the Thiokol contract (NAS8-97238) and that DCMA accepted the delegation on January

27, 2000. The complete text of management's response is in Appendix F.

Evaluation of Response. Management's comments are not fully responsive to the

recommendation. The actions taken by Johnson are appropriate, but not complete. We

consider the delegations complete when they are accepted by DCMA. We do not agree that

the actions taken by Marshall are appropriate. This property is located at off-site contractor

locations. NASA should follow its policy of delegating property administration to DCMA for

off-site contractors. Accordingly, we maintain our position that property delegations should be

completed for these contracts. We, therefore, request that management reconsider its position

and provide comments explaining the reasons for not following this policy.

We concur with management that property administration for the Thiokol contract (NAS8-

97238) has been delegated and accepted. We believed that this contract had not been

delegated because we were provided documentation that showed that the contracting officer

signed the Thiokol property delegation (Form 1430) on March 1, 2000. Subsequent
6

information showed that the delegation was made and accepted in January 2000. Accordingly,

we removed the Thiokol contract from Appendix E and revised the report accordingly.

The recommendation is not resolved and will remain undispositioned and open until the property

delegations for the Johnson contracts are completed and the delegation issue for the Marshall

contracts is resolved.

2. The Associate Administrator for Procurement should strengthen administrative

controls to ensure that NASA complies with the FAR and NASA FAR Supplement

regulations that address property administration. Specifically, NASA should

establish milestone dates for NASA issuance of delegations on new contract

awards and develop controls that ensure that annual property system analysis

reports are received in a timely manner.

Management's Response. Concur. Management stated that it will review the current

NASA FAR Supplement. A corrective action official and closure official have been selected.

The projected closure date for this action is March 31, 2001 (see Appendix F).

Evaluation of Response. The Associate Administrator's planned actions are responsive to

the recommendation. The recommendation is resolved but will remain undispositioned and

open until agreed-to corrective actions are completed.

3. The Center Directors at Johnson and Marshall should ensure that contracting

officers comply with FAR and the NASA FAR Supplement regulation pertaining to

property administration.

Management's Response. Concur. The Johnson Center Director stated that the Johnson

IPO will address the Johnson Procurement Forum on November 8, 2000, and will cover the

need for contracting officers to delegate remote contracts. Johnson is also considering spot

checks on contracting officer files to verify that delegations have been made and accepted. The

Marshall Center Director stated that the Procurement Office would issue guidance by

December 31, 2000, to all contracting officers on the importance of complying with pertinent

regulations (see Appendix F).

Evaluation of Response. The Center Director's planned actions are responsive to the

recommendation. We encourage Johnson to issue guidance similar to that of Marshall. The

recommendation is resolved but will remain undispositioned and open until agreed-to corrective

actions are completed.

4. The Center Directors at Johnson and Kennedy should resolve the property

administration issue at Kennedy. Resolution should result in either Kennedy
7

acceptance of the property administration delegation and assurance that adequate

resources will be provided to properly oversee the contractors or Johnson retention

of the property administration function.

Management's Response. Concur. The Johnson IPO is modifying delegation acceptance

letters dated June 30, 2000. The modifications reflect changes in personnel and changes in

responsibilities that resulted from the FY 2000 Industrial Property Conference (see Appendix

F).

Evaluation of Response. The Center Director's planned actions are responsive to the

recommendation. The response, however, does not project when the acceptance letters will be

finalized. Accordingly, we request that management provide a closure date for this

recommendation. The recommendation is resolved but will remain undispositioned and open

until the letters are finalized and adequate resources are provided to oversee the contractors.
8

Appendix A. Objectives, Scope, and Methodology

Objective

Our overall objective, which will be addressed in future reviews, is to determine whether NASA

and its delegated agencies appropriately manage Government property held by contractors.

This report specifically addresses conditions regarding delegation of property administration.

Scope and Methodology

The audit scope focused primarily on property administration delegations made on or before

February 29, 2000. We made limited reviews of Government property management, which we

will address, in subsequent reviews. We reviewed contract documentation for 119 contracts

with more than $11 billion in contractor-held property to determine whether property

administration requirements and guidance was followed. We did not review any ONR

contracts. We reviewed pertinent audit reports and relevant DOD and NASA guidance. We

interviewed program and contractor personnel to understand property administration delegation.

We did not assess the reliability of computer-processed data because our survey raised

concerns about the validity and reliability of this data. We plan to address this issue in a future

review.

Management Controls Reviewed

We reviewed the following management controls:

• FAR Part 42, "Contract Administration and Audit Services," Subpart 42.2, "Contract

Administration Services," and Subpart 42.3, "Contract Administration Office Functions,"

states that property administration can be delegated.

• FAR Part 45, "Government Property," Subpart 45.3, "Providing Government Property to

Contractors," describes policies and procedures for providing Government property to

contractors.

• FAR Part 45, "Government Property," Subpart 45.5, "Management of Government

Property in the Possession of Contractors," prescribes the minimum requirements

contractors must meet in establishing and maintaining control over Government property.

• NASA FAR Supplement Part 1845, "Government Property," Subpart 1845.1, "General,"

states that NASA will use DOD Manual 4161.2-M, "Manual for the Performance of

Contract Property Administration," when reviewing a contractor's property administration

system.
9

 Appendix A

• NASA FAR Supplement Part 1845, "Government Property," Subpart 1845.72, "Contract

Property Management," Section 1845.7203, "Delegations of Property

Administration and Plant Clearance," states that when property administration is delegated

to DOD, property administration will be performed in accordance with DOD regulations

and procedures.

• NASA FAR Supplement Part 1845, "Government Property," Subpart 1845.72, "Contract

Property Management," Section 7204, "Retention of property administration and plant

clearance," states that NASA may occasionally retain the property administration and plant

clearance functions.

• DOD Manual 4161.2-M, "DOD Manual for the Performance of Contract Property

Administration," sets forth instructions to ensure uniformity and consistency in the

administration of the contract provision relating to Government property in the possession of

contractors.

Audit Field Work

We performed the audit field work from October 1999 through July 2000. We conducted the

audit in accordance with generally accepted government auditing standards.
10

Appendix B. FAR and NASA FAR Supplement Guidance

The FAR and NASA FAR Supplement provide guidance for contract administration, which

includes property administration delegation and acceptance. The guidance includes the

following:

• FAR Subpart 42.2, "Contract Administration Services." This subpart describes

contract administration responsibilities and assignment of contract administration.

• FAR Subpart 42.3, "Contract Administration Office Functions." This section lists the

various functions, such as property administration, that can be delegated.

• NASA FAR Supplement Part 1842, "Contract Administration and Audit Services."

This part describes the assignment of contract administration (delegation and acceptance)

process.

• NASA FAR Supplement Subpart 1845.1, "General." This subpart states that property

administration is normally delegated unless NASA retains property administration. This

subpart also states that property administrators will use the DOD Manual for the

Performance of Contract Property Administration.

• NASA FAR Supplement Subpart 1845.72, "Contract Property Management." This

subpart provides a general description of contract property management.

• NASA FAR Supplement Subpart 1845.7209-1, "Government property at alternate

locations of the prime contractor and subcontractor plants." This subpart provides

property administration delegation and acceptance procedures to be followed whenever a

NASA Center delegates property administration to another NASA Center.
11

Appendix C. Property Management Functions

DOD Manual for the Performance of Contract Property Administration lists 23 duties and

responsibilities that a property administrator must perform. These include:

1. Administering contract provisions, requirements, and obligations relating to contractor-held

property.

2. Participating in pre-award surveys and postaward reviews.

3. Reviewing contracts to ensure that property is identified and applicable provisions are

included.

4. Ensuring that contractor property organizations are aware of and understand applicable

provisions of Government contracts dealing with contractor-held property.

5. Establishing contract property control data files.

6. Providing a contracting officer with recommendations concerning contractor liability for

property loss, damage, or destruction.

7. Granting relief of responsibility for property loss, damage, or destruction.

8. Performing functions described in FAR 45.5, "Management of Government Property in the

Possession of Contractors."

9. Developing and applying a property system analysis.

10. Evaluating the contractor's property management system.

11. Advising NASA officials of contractor's noncompliance with contract terms.

12. Notifying contracting officer of excessive acquisition by the contractor.

13. Performing reviews of property acquisition, control, management, use, and disposition.

14. Supporting and assisting contractor's management.

15. Reviewing Government-furnished material for receipt and reconciliation.

16. Providing guidance, counsel, and direction to Government and contract managers.
12

17. Ensuring that the contractor promptly reports excess property.

Appendix C

18. Supporting the assigned Plant Clearance Officer.

19. Obtaining and reviewing contractually required reports.

20. Preparing and reviewing other reports prescribed by higher headquarters.

21. Requesting supporting property administration.

22. Performing supporting property administration.

23. Recognizing the functions of other Government personnel having cognizance of property,

and obtaining their assistance when required.
13

Appendix D. Property Management System Analysis Elements

The DOD Manual for the Performance of Contract Property Administration lists 15 system

analysis techniques by property function:

1. Property Management. Ensures that the contractor establishes and maintains an

approved property control system.

2. Acquisition. Ensures that only contractually approved items are bought or fabricated.

3. Receiving. Ensures that damaged or missing items are resolved and that accepted items

are properly recorded.

4. Identification. Ensures that property is properly identified, marked, and recorded.

5. Records. Ensures proper accountability of property.

6. Movement. Ensures that property is moved under the proper authority, with appropriate

documentation and adequate protection.

7. Storage. Ensures that stored property is controlled, protected, and preserved.

8. Physical Inventories. Ensures that the contractor schedules and performs inventories in

accordance with the contractor's approved property control system.

9. Reports Preparation. Ensures that the contractor's property reports are timely, accurate,

and complete.

10. Materials Consumption. Ensures that materials are consumed in accordance with

contract requirements and are not diverted to other work.

11. Utilization. Ensures that the contractor used property in accordance with the contract

terms and conditions.

12. Maintenance. Ensures that the contractor established and follows an appropriate method

of maintaining property.
14

13. Subcontract Control. Ensures that the contractor established adequate subcontract

control.

14. Disposition. Ensures that the contractor has a system for disclosing excess property and

effecting its timely disposition.

15. Contract Close-Out. Ensures that the contractor has a method to ensure completion of

all contract closeout actions related to property.
15

Appendix E. Contracts Without Completed Contract Delegations

Contract

Number

Contractor Property Value

Johnson

NAS9-19569 Canadian Commercial Corporation $ 4,720,214

NAS9-19605 Honeywell, Inc. 282,705

NAS9-97199 Spacehab* 15,551,122

NAS9-98100 Lockheed-Martin* 581,460,942

NAS15-10000 The Boeing Company* 1,291,989,965

Subtotal $ 1,894,004,948

Marshall

NAS8-40369 Ion Electronics $ 12,628,181

NAS8-97017 Physical Sciences 23,642

NAS8-97036 Sohar 21,067

NAS8-97309 University of Arizona 7,757

NAS8-98028 Makel Engineering 10,000

NAS8-98077 Digital Optical 14,271

NAS8-98086 X-Ray Optical 55,331

NAS8-99076 Adroit Systems 1,914

Subtotal $ 12,762,163

Grand Total $ 1,906,767,111

* The Kennedy IPO did not accept property administration responsibility for these

contracts.
16

Appendix F. Management's Response
17

Appendix F
18

Appendix F
19

Appendix F
20

Appendix F
21

Appendix F
22

Appendix F
23

Appendix G. Report Distribution

National Aeronautics and Space Administration (NASA) Headquarters

A/Administrator

AI/Associate Deputy Administrator

B/Chief Financial Officer

B/Comptroller

BF/Director, Financial Management Division

G/General Counsel

H/Associate Administrator for Procurement

HK/Director, Contract Management Division

HS/Director, Program Operations Division

J/Associate Administrator for Management Systems

JM/Acting Director, Management Assessment Division

L/Associate Administrator for Legislative Affairs

M/Associate Administrator for Space Flight

NASA Centers

Director, John F. Kennedy Space Center

Director, George C. Marshall Space Center

Chief Counsel, John F. Kennedy Space Center

Industrial Property Officer, John F. Kennedy Space Center

Industrial Property Officer, George C. Marshall Space Flight Center

Non-NASA Federal Organizations and Individuals

Assistant to the President for Science and Technology Policy

Deputy Associate Director, Energy and Science Division, Office of Management and

 Budget

Branch Chief, Science and Space Programs Branch, Energy and Science Division, Office

 of Management and Budget

Associate Director, National Security and International Affairs Division, Defense

 Acquisition Issues, General Accounting Office

Professional Assistant, Senate Subcommittee on Science, Technology, and Space
24

Appendix G

Chairman and Ranking Minority Member – Congressional Committees and

Subcommittees

Senate Committee on Appropriations

Senate Subcommittee on VA, HUD, and Independent Agencies

Senate Committee on Commerce, Science, and Transportation

Senate Subcommittee on Science, Technology, and Space

Senate Committee on Governmental Affairs

House Committee on Appropriations

House Subcommittee on VA, HUD, and Independent Agencies

House Committee on Government Reform

House Subcommittee on Government Management, Information, and Technology

House Subcommittee on National Security, Veterans Affairs, and International Relations

House Committee on Science

House Subcommittee on Space and Aeronautics

Congressional Member

Honorable Pete Sessions, U.S. House of Representatives
NASA Assistant Inspector General for Auditing

Reader Survey

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