Source: http://www.acq.osd.mil/pepolicy/general/faq.html
Timestamp: 2017-05-26 11:15:41
Document Index: 606190443

Matched Legal Cases: ['art 45', 'art 45', 'art 45', 'art 45', 'art 31', 'art 45']

Property Custodians Valuation, Audit
Capitalization Threshold	MEV to GEV
FIAR Information SOA & MICP
What constitutes “accountable personal property?”
What is my role as it pertains to the accountable personal property entrusted to me?
What role does Item Unique Identification (IUID) play in property accountability?
How often must I perform a physical inventory of the accountable property under my purview?
How do I report the accountable personal property that has been lost, stolen, or damaged?
What do I do when equipment is found on base and needs to be brought to record?
Are enlisted DoD personnel allowed to sell the uniforms issued to them?
What is an APSR?
What does the APSR definition mean for my property?
What does an APSR do?
Why is an APSR allowed to receive data from contractor property systems?
Why is a contractor not supposed to access an APSR?
What is property in the possession of a contractor?
What is Government Furnished Property (GFP)?
What is Government Furnished Equipment (GFE)?
What is Government Furnished Material (GFM)?
Are DoD Components required to establish and maintain records of Government Furnished Equipment?
What is Contractor Acquired Property?
What is Progress Payment Inventory?
Are DoD Components required to establish records and maintain accountability of Contractor Acquired Property and Progress Payment Inventory?
What about property accountability?
Well then how does the proper financial treatment of PIPC take place?
Is the DD Form 1662 used for financial reporting purposes?
Did anything replace the DD Form 1662?
Why do I have to account for IUS?
Why do I have to track Software In Development costs for capital IUS?
Do I need to track individual asset licenses in the APSR?
Is a sharepoint website considered IUS?
Is Microsoft Office IUS?
How should bulk, annual, etc. licenses be treated?
What is the reporting period for completing an internal control assessment?
As assessable unit managers (AUM), what is required by each AT&L organization SOA Point of Contact?
How are the corrective action plans tracked?
The Effects of Operational Tempo (OPTEMPO) on the Useful Life of Military Equipment
What is military equipment useful life?
How do we measure useful life today?
What has the study revealed about the useful life of military equipment impacted by increased OPTEMPO?
Who conducted the study on the impacts of OPTEMPO on useful life and is a report available?
What type of calculation or methodology will be used to determine the useful life of military equipment when based on increased OPTEMPO?
When the methodology is derived, who will be responsible for determining the impact of increased OPTEMPO on military equipment, and how will the information be obtained?
Will the OPTEMPO methodology treat annual peacetime and wartime OPTEMPO separately such that each will have its own unique fatigue factor?
Will the OPTEMPO methodology to determine useful life apply to all programs and all equipment?
Does the useful life study on OPTEMPO have implications for military equipment that did not participate in the Global War On Terrorism (GWOT)?
Has there been an effort to standardize the terminology used to quantify the equipment usage so that it will be possible to make like comparisons between the different Services?
Will technical obsolescence be a factor in considering the useful life of equipment impacted by increased OPTEMPO?
Can the same OPTEMPO methodology used to determine military equipment useful life be scaled down to evaluate the useful life on individual spare parts?
Given that fatigue further degrades
equipment usage and given that most legacy systems do not have integrated
prognostic or diagnostic systems, does the Property and Equipment Policy
Office support and advocate that future acquisition systems should have
integrated/embedded prognostic/diagnostic systems?
Is there any evidence that increased situational awareness (due to usage of sensors, unmanned systems, etc.) reduces a system’s fatigue?
How does OPTEMPO apply to rapid acquisition joint programs with non-conventional life, such as the Mine Resistant Ambush Protected (MRAP) Vehicles?
How does General Support (GS) and Depot maintenance impact the useful life determination of equipment affected by increased OPTEMPO?
Accountable Personal Property is equipment or administrative property that meets the Department’s accountability threshold: It has an original acquisition threshold of $5,000 or greater and is classified, sensitive, or furnished to a contractor. Accountable personal property is required to be recorded and reported in the relevant accountable property management system or system of record, to be kept current and correct (including location) throughout its lifecycle.
All persons entrusted with Government property are responsible for its proper use, care, and physical protection, including: Using Government property for official business only
Complying with all applicable property accountability and management regulations
Contacting the appropriate authority if property is subjected to undue risk of loss, damage, destruction, theft, fraud, waste, abuse, and/or mismanagement
Reporting theft, as well as lost, damaged, or destroyed property
Reporting any misuse of Government property to appropriate investigative organizations through proper channels
The IUID is required for all accountable personal property. The IUID will be housed in the IUID Registry, which provides the authoritative source for Unique Item Identifiers (UIIs) and their pedigree data, including acquisition cost. The UII shall be recorded in only one property accountability system of record at a time. Note that the IUID Registry is neither an accountability system, nor an asset-in-transit visibility system.
Capital, sensitive, and military equipment shall be inventoried at least annually; other property shall be inventoried at least every 3 years. Physical inventory plans must be coupled with an awareness of the item’s general sensitivity, to include its acquisition or replacement cost, its security classification, and/or its criticality. Sampling methods may be used, where appropriate, provided they achieve statistically valid results. Such methods may not be appropriate for all types of property, e.g., hazardous, classified, or sensitive property.
All personal property is to be fully accounted for throughout its lifecycle; from acquisition and use to re-use and final formal disposition.
When Government property has been lost (including theft), damaged, or destroyed, it is to be promptly reported on a Report of Survey (DD Form 200, “Financial Liability Investigation of Property Loss”) and processed in accordance with the requirements of Volume
12, Chapter 7, DoD 7000.14-R, “DoD Financial Management Regulation.”
The equipment should have the identifying information recorded, and then an inventory adjustment type of action should be performed. Check with your local accountable property officer for the appropriate forms and required information.
There is not a specific law that prohibits selling day to day uniforms, however, each Service has their own policies in handling the disposal of uniforms. Check with the commanding officer or with a supply officer for disposal priorities of uniforms.
An Accountable Property System of Record (APSR) is defined in detail as: the business system/application used to account for and maintain accountability of government property. This system/application represents the authoritative official records for the government entity regarding the property it is responsible for and reflects the appropriate updates to the property as a result of life cycle transactions. To ensure data integrity, there must be one – and only one – system of record for a given piece of property. The APSR is a subsidiary ledger to the financial systems general ledger and represents the complete history of all transactions impacting the property.
What does the APSR definition mean for my property? Your government property will be in different APSRs depending on what your property is and how your data is maintained. For example, the type of data that must be maintained for an equipment-type item is not identical to the data maintained for a consumable-type item. This may require two separate systems or modules to maintain the information. The DoD path forward is pointed to getting an enterprise system that can do all transactions, especially those of a financial nature. The APSR information has a direct impact to the financial data contained in these enterprise systems. Since multiple modules or systems maintain records of property, it is important to identify the system that holds the accountable record to be used for fiduciary purposes. Once these systems or modules are identified as holding the accountable information, we will have a higher degree of assurance that the property is only being counted once in our financial information.
What does an APSR do? An APSR holds the most current record of an asset’s status. This can include the condition of the property, who has it, where it is, and how much it cost. The important thing to realize is many systems hold information about property, so a conscious decision must be made about which system or record is primary, i.e. accountable. The accountable record information must then be exported into a financial system to complete the financial reporting process. As you may realize, if there is more than one system reporting accountable information about a piece of property you may get double or even triple reporting of that information. An APSR can be specific to the type of property but does not have to be. It is the data maintained that makes a difference here. An APSR can maintain data for just equipment or it can maintain data for equipment, inventory, and real property. The final output, however, is data that will be used in financial reporting. There can be many systems, and many property systems, but only one set of accountable data. Since the accountable data is coming from one source, that source is the system of record for the property.
Why is an APSR allowed to receive data from contractor property systems? An APSR holds the official record of government property. When the government furnishes property to a contractor via a contract, the government passes custody to that contractor. The contractor has responsibilities toward that property which are outlined in the government property clause (FAR 52.245-1). As the contractor reports changes to the property, e.g. damaged beyond repair, the information should be fed to the APSR to show the change in accountability over the property. We no longer report financial information about something damaged beyond repair, but if the information from the contractor is not used to change the accountable record it causes reporting errors. As always, it is prudent to ensure there are controls in place to ensure the data is of usable quality and is accurate. The Department established a central system for contractors to use to report data. This system is the IUID Registry. Through Wide Area Workflow (WAWF), the contractor can report their property data to the IUID Registry. Both of these government systems (WAWF and IUID Registry) can be used to add controls to how the data is further used in the appropriate APSRs. Back to Top
Why is a contractor not supposed to access an APSR? The APSR is the official government record holding all the relevant information required about property. One of the important factors in demonstrating good accountability over government assets and information is the concept of “separation of duties.” Though it is acceptable to use the data generated by a contractor, allowing a contractor direct access to the government records does not demonstrate a separation of duty. An easy way to think of this is the old adage, “don’t let the fox guard the hen house.” There are some exceptions when it comes to APSR access, but the prevailing situations require this separation. Back to Top
What is property in the Contract Property?
Contract Property is Government-owned property in the custody or stewardship of a contractor—accountable to a Government (DoD) contract.
There are four cohorts of contract property:
Government furnished property is property that is furnished to a contractor for performance of a Government (DoD) contract. There are two types of Government Furnished Property:
Back to Top	What is Government Furnished Equipment (GFE)?
Government furnished equipment or “GFE” consists of equipment, special tooling, or special test equipment that is provided to a contractor for use on a Government contract (reference Federal Acquisition Regulations, Part 45). Back to Top
Government furnished material (GFM) is another form of Government-owned property that is sometimes provided to contractors. Raw titanium for use in ship construction, nuts, bolts, washers, screws, and other consumable items are all examples of GFM. Material does not include equipment, special tooling, and special test equipment.
Unlike GFE, GFM is consumed or expended by the contractor during the performance of a contract. The cost of GFM is included in the cost of the contract end-item to be delivered. Contractors establish and maintain records of GFM in accordance with FAR requirements (reference Federal Acquisition Regulations, Part 45).
Yes. DoD Components are required to “establish records and maintain accountability for property (of any value) furnished to contractors as Government Furnished Property.” This requirement also includes property that is loaned and/or otherwise provided to outside entities such as Federal agencies, State and local governments, and foreign governments (reference DoDI 5000.64). Contractors also keep and maintain records for stewardship purposes in accordance with FAR requirements (reference Federal Acquisition Regulations, Part 45). This requirement does not normally extend to GFM, as GFM is destined for consumption.
What is Contractor Acquired Property (CAP)?
Contractor acquired property is property that Government contractors acquire under cost-reimbursement contracts—and to which the Government takes title (reference Federal Acquisition Regulations, Part 45). Unlike Government furnished property, contractor acquired property has not been delivered to the Government.
What is Progress Payment Inventory (PPI)?
Progress Payment Inventory is property that Government contractors acquire under certain fixed-price contracts—and to which the Government takes title (reference Federal Acquisition Regulations, Part 31, Contract Cost Principles and Procedures). Like contractor acquired property, progress payment inventory also has not been delivered to the Government.
Back to Top	Are DoD Components required to establish records and maintain accountability of Contractor Acquired Property (CAP) and Progress Payment Inventory (PPI)?
No. This property is not recorded in DoD accountable property systems of record (reference DoD FMR 7000.14-R, Volume 4, Chapter 6; DoD Contractor Acquired Property Business Rule (December 22, 2007)). Why? Because although DoD may have title to such property, delivery, i.e., recognition has not yet taken place. Consistent with SFFAS No. 6, DoD recognizes P&E only upon delivery. Should this property be delivered, i.e., a contract line item established, the property would become Government furnished property to that contract. At that point, DoD Components are then required to establish records (in their accountable property system of record). More guidance can be found in the Procedures, Guidance, and Information (PGI) 245.
What about property accountability for CAP or PPI?
Contractors are required to establish and maintain records of such property in accordance with FAR requirements (reference Federal Acquisition Regulations, Part 45).
Property accountability is maintained through oversight of
contractor systems. For PPI, for example, contractors
are required to “maintain an accounting system and controls adequate for the proper administration of the progress payment clause.” The accounting system is audited by the Defense Contract Audit Agency (DCAA). For contractor acquired property, contractors are required to establish and maintain a property management system; oversight, surveillance and audit of this system is conducted by the agency responsible for contract administration, e.g., DCMA (reference Federal Acquisition Regulations, 52.245-1, Government Property Clause).
Well then how does the proper financial treatment of contract property take place?
For Government Furnished Equipment, the property should already be recorded in the accountable property system of record (reference DoDI 5000.64, paragraph 6.6), and so should be reported as if still in the possession of DoD. For contractor acquired property and progress payment inventory, the costs are incorporated into the end-item, as follows:
For CAP, costs are accumulated in the “Other Assets” account for posting to General PP&E account when construction or manufacturing of the end item to be delivered is completed). For General and Military equipment, acquisition cost is transferred to applicable PP&E account on the date the contract end-item is placed in service—and is then recorded in accountable property system of record.
For Progress Payment Inventory, costs are accumulated in the “Other Assets” account. For General and Military equipment, “Other Assets” – amounts are liquidated to applicable PP&E account on the date asset is placed in service—end-item delivered is recorded in accountable property system of record.
No. The DD Form 1662 is not adequate for such purposes and has been discontinued.
Contractors are required by DFARS
252.211-7007 to report to the DoD IUID Registry Government-furnished
property in their possession. The IUID registry is an excellent source of
information pertaining to GFP—and
is the authoritative source for its acquisition value (reference DoDI
8320.04).
Questions regarding Real Property should be referred to ODUSD Energy, Installations, and Environment.
Internal Use Software, or IUS, is a class of assets as defined by SFFAS 10 (hyperlink). In general terms, IUS consists of the software applications that are used in your day to day business. This could be an accounting system, a maintenance system, or other similar application used in your business operations. Also see DoDI 5000.xa.
Government entities are required to track and report on the ways their funds have been used, to include reporting on what was purchased and how much it cost. DoD tracks assets purchased in a number of ways, but for IUS the purchases are tracked in an APSR, an accountability or managerial system, and an accounting system. Intangible assets are a little more difficult to track and manage, but the challenges do not negate our legal responsibilities to report on what we are accountable for and what we have used funds on.
Why do I have to track Software In Development costs for capital IUS? The tracking and recording of software development costs during the development phase of IUS projects is a requirement for financial reporting. Additionally it also allows for the accumulation of costs throughout the project lifecycle to support cost accumulation for valuation and financial decision making and demonstrates the accountability of funding execution prior to the capitalization of the asset.
Do I need to track individual asset licenses in the APSR? There is no requirement to track individual asset licenses in an APSR. In general a bulk purchase of licenses would be the only IUS asset that meets that criteria for capitalization and should be recorded in the APSR as a single IUS asset for accountability purposes. However, individual licenses should be managed in an accountability or managerial system to track the day to day usage of the licenses.
Is a SharePoint website considered IUS? Whether a SharePoint website is considered IUS may depend on a number of factors such as whether there was custom development on the website, whether it was specifically budgeted and who owns the SharePoint license. See the following scenarios for guidelines on making the determination.
Simple SharePoint website – no custom development – Not IUS
Budgeted SharePoint website – Maybe IUS
SharePoint website with custom development – Maybe IUS
SharePoint website with heavy development – Likely IUS
SharePoint license holder – Likely IUS
Is Microsoft Office IUS? Yes. While a single Microsoft Office license is considered as IUS it is unlikely to meet the criteria for capitalization. However, a bulk purchase of Microsoft Office may meet the criteria for capitalization.
How should bulk, annual, etc. licenses be treated? All licenses, of at least 2 years or perpetual licenses should be accounted for as IUS in an APSR or management system. Annual licenses cannot be considered as capital IUS and DoD CIO should be consulted to determine any accountability requirements.
Statement of Assurance What is the reporting period for completing an internal control assessment?
The reporting period covers a one year period from July 1 through June 30 of the following calendar year. Back to Top As assessable unit managers (AUM), what is required by each AT&L organization SOA Point of Contact?
Each AT&L assessable unit manager will be required to complete the annual Managers’ Internal Control Program training course. The AUM will then have to complete an internal control assessment of the organization. At the conclusion of the assessment, the AUM identifies internal control accomplishments and/or risks. The risks that may adversely affect the organization’s mission or operations are then assessed. If the risk, is considered a material weakness then the AUM will develop a corrective action plan (CAP). The material weakness must be approved at the Director level. The CAP will be tracked and progress on closing out the weakness will be reported quarterly to P&EP.
Back to Top How are the corrective action plans tracked?
P&EP requests quarterly updates on the status of the reported milestones. Status is then provided to the Director, Acquisition Resources and Analysis and OUSD(Comptroller). OUSD(C) presents status updates to the Defense Business Council. Organizations that are not completing corrective actions according to their plans will be required to submit a rationale for the slippage and a revised plan. Back to Top OPTEMPO
What is the study being done on military equipment useful life?
The Property and Equipment Policy Office is conducting a study on the impacts of Operational Tempo (OPTEMPO) on the useful life of military equipment. The study is looking at how the changing operational demands impact the life expectancy, or useful life of military equipment.
Military Equipment useful life is how long a piece of military equipment, such as a tank or airplane, can be used before it is worn down to a point where it either needs to be replaced or go through a major service life extension.
Useful life is generally measured in years, which are derived from an engineering estimate of usage under peacetime mission scenarios. Back to Top
In looking at the variables that could impact the useful life of military equipment, there are two that seem to have the most dramatic effects: Usage – miles driven or hours flown Fatigue – where and how military equipment
KPMG LLP, a support contractor for the Department, developed the methodology, with extensive assistance from DoD Comptroller and selected program management offices. The methodology was validated with additional programs. In addition, a determination was made as to which programs the methodology applies and to which it does not apply. The reports and memorandum may be found on the OPTEMPO web page.
Back to Top What type of calculation or methodology will be used to determine the useful life of military equipment when based on increased OPTEMPO?
We are seeking to determine a method that analytically considers usage, fatigue, and losses. These three factors impact on program requirements; on the readiness of items of equipment and on how many items are available to meet rotational demands. So, the methodology needs to look collectively at the consumption of service life for a program.
Operators and Maintainers (e.g., Property Custodians and Hand Receipt Holders) of the equipment are ultimately responsible for determining the useful life impacts caused by increased OPTEMPO. The Department’s goal is to have the capability to extract the necessary data at the enterprise level from whatever Service systems the operators and maintainers use to record that information.
Will the OPTEMPO methodology treat annual peacetime and wartime OPTEMPO separately, such that each will have its own unique fatigue factor?
Yes it will. Also, different systems must be looked at in different ways. The fatigue factor generally would apply to more stressing environments. Therefore, it would seem logical to consider fatigue differently in combat or other high-stress operations (e.g., the use of helicopters to fight forest fires in California) than in normal peacetime operations. This concept will be considered to determine how it might apply to different systems in different operational circumstances.
No it will not. There are some programs and pieces of equipment managed today in terms of years, which is probably the right way to manage that equipment in terms of useful life. Satellites and ships are examples. An important part of the overall study is to determine where and how it applies, based on how equipment is operated, before fully implementing the program.
Yes it will. For example, increased operational support provided in disaster scenarios such as fighting forest fires or providing support after Hurricane Katrina, would be types of operations that are OPTEMPO related. And so, we would expect an impact on the useful life of military equipment.
Yes, there has been a concerted effort to standardize much of the terminology associated with this effort. As an example, the Deputy Under Secretary of Defense for Logistics and Materiel Readiness recently signed a memorandum to standardize the use of the terms “reset” and “recap.”
The OPTEMPO methodology does not consider technical obsolescence. The OPTEMPO methodology looks strictly at usage. The formula did not consider technology because it is difficult to predict future technological advances.
The OPTEMPO methodology was designed to assess impacts on the useful life of capitalized equipment with the intent of providing better information to leaders making investment decisions. The value gained for the effort expended is worthwhile in this case. Spare parts are funded differently and expensed differently on financial statements. No consideration has been given to the value to be gained for applying a similar process to spare parts.
Given that fatigue further degrades equipment usage and given that most legacy systems do not have integrated prognostic or diagnostic systems, does the Property and Equipment Policy Office support and advocate that future acquisition systems should have integrated/embedded prognostic/diagnostic systems?
The Department advocates the need to understand the impact of fatigue on military equipment that adversely affects useful life. The use of embedded systems to measure fatigue is one way to collect relevant data. However, the use of embedded systems is a programmatic decision that should be considered by the appropriate program office for applicability and cost effectiveness.
This is not being considered in the ongoing analysis of the impacts of OPTEMPO on useful life. OPTEMPO is the pace at which a piece of equipment is used, and fatigue is determined based upon factors that occur during usage, such as overloading. If usage and fatigue are reduced for whatever reason, the impact on useful life is less. The OPTEMPO useful life study attempts to quantify the impacts of whatever amount of usage and fatigue that actually occurs on a given system.
All equipment has an operating tempo, whether it is a common vehicle, like the HMMWV, or a non-conventional vehicle like the MRAP. When we look at useful life, we need to consider the operating tempo for that type of equipment. This is not a one-size-fits-all methodology that applies across the board. The OPTEMPO methodology is applied on a program-by-program basis.
Maintenance at all levels is critical to keeping equipment operational. In the initial determination of useful life for an item of equipment, the assumption is made that operator and organizational maintenance will be performed as required to keep the item of equipment operational throughout its estimated life. Maintenance includes the replacement of broken or worn out parts at the appropriate maintenance level. The extent to which maintenance is performed or not performed will impact the useful life of equipment. However, normal maintenance does not restore useful life. And so, both general and intermediate maintenance as well as organizational maintenance all have an impact on equipment. And so, in looking at this formula, the assumption made is that the maintenance that needs to be done is continuing to be done. That will allow the Department to get the expected useful life out of the equipment that was originally planned.
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