Passing DCMA Government Property Audits with A2B Tracking and Costpoint
By Peter Collins, Founder and CEO, A2B Tracking
Defense Contract Management Agency (DCMA) Audits come with the territory when conducting business with the United States Department of Defense (DoD) and other government agencies. DCMA Audits ensure that government resources, including Government Furnished Property/Equipment (GFP/GFE), are being properly allocated and tracked by government contractors that are awarded contracts with the Federal Government. In addition to GFP or GFE, Contractor Acquired Property (CAP), where the contract obligates the contractor to acquire the property during the course of the contract, may also be subject to audit.
Passing a government property audit means being able to consistently substantiate the existence and completeness of government property inventory. Contractors need to be audit ready from “floor to book” and “book to floor” at all times. In other words, there needs to be complete accountability for all DoD assets and property.
This blog outlines the considerations that should be made when developing a plan for managing GFE to ensure successful government property audits. The GFE management plan should start with asset identification and an assessment of applicable government reporting systems and the organization’s own business systems. Audit readiness can be further accelerated by utilizing an asset tracking system integrated with an Enterprise Resource Planning (ERP) tool, this ensures compliance with both Government Property Management and Accounting Systems Standards.
Item unique identification (IUID) requirements for government property typically mandate that all government property be permanently marked with a unique ID in the form of a 2-Dimensional barcode. IUID and Radio Frequency Identification (RFID) technology are both commonly employed as Auto-ID technology to track and manage government property.
Unfortunately, one of the things that we have found working with contractors is that even though government property is almost always marked with a barcode or an IUID, the barcode is not always scanned for tracking purposes. Deploying a modern Government Property Management system allows organizations to take full advantage of the auto-ID technology and the efficiencies that they provide.
Reporting to Government Systems
Government property not only needs to be tracked and managed; but the asset data also needs to be reported through to government systems. Reporting property data to the PIEE system (Procurement Integrated Enterprise Environment) is a critical contract obligation that cannot be overlooked.
The PIEE system which includes WAWF (Wide Area Workflow), IUID Registry, GFP Module and others is an e-commerce platform that continues to grow and evolve. This is where contractors can fulfill their obligations to provide their property data and transactions of information through to the government which eventually flow through to the Accountable Property Systems of Record (APSR).
The PIEE systems were designed to take advantage of a direct data exchange between the contractor's property system and PIEE so that with the click of a button it can process hundreds of assets at a time. Utilizing a compatible tracking system can eliminate the need to enter this data manually, saving time and reducing errors that could cause rejected shipments or withheld payments until the situation has been resolved.
Government Property clause FAR 52.245-1
FAR 52.245-1 stipulates that contractors need to have a system of internal controls to manage Government property in its possession. Furthermore, maintaining an adequate Government Property Management System is required per the Contractors Business Systems clause.
A2B Tracking’s integration to Costpoints' Fixed Assets module provides a complete Government Property Management solution that supports contractors with an Asset Management system that meets all requirements of FAR 52.245-1. This ensures that, in the event of an audit, the Property Management and Accounting Systems are compliant with Federal Regulations.
A2B Tracking’s platform, UC! Web, provides an automated data exchange to PIEE, WAWF, GFP Module, IUID Registry and PCARSS for military assets and shipments, property transfers and asset lifecycle events. Features also include IUID Compliance, robust audit trails for complete lifecycle asset management, as well as advanced barcode and RFID technology for accurate and efficient inventory tracking.
Costpoint provides unparalleled visibility and financial control for better management of project costs. The purpose of Costpoint is to aid organizations with maintaining CAS compliance, as well as Federal Acquisition Regulation (FAR), Defense Federal Acquisition Regulation Supplement (DFARS), and Sarbanes-Oxley Act (SOX) compliance, along with other accounting obligations in order to pass DCAA audits. Virtually every transaction is recorded to an element of a contract or a project work breakdown structure. This means that financial traceability to the final cost objective is assured.
Accelerating Audit Readiness
Costpoint ensures comprehensive DCAA compliance to help defense contractors fulfill their financial responsibilities. UC! Web provides total compliance to Government property obligations with enhanced asset visibility, robust audit trails and automated data exchange to PIEE, WAWF, GFP Module, IUID Registry and PCARSS to easily report to government systems.
Maintaining these internal systems to fulfill obligations to the Contractors Business Systems clause is challenging. Having a direct integration between your accounting system and your government property management system keeps all your data in sync and saves hundreds of hours annually.
Modern Government Property Management systems need to support the contractor with automation to leverage Auto-ID technology and automation to have a direct exchange to government systems. Organizations need these systems to be centralized and integrated to ERPs so that the entire organization has access to the same data. And most importantly, Property managers need to have a system that will alert them to errors and non-compliance before they report to their APSRs and receive corrective action reports.
Learn more about how Costpoint and UC! Web can support your organizations audit readiness initiatives by watching a breakout session that A2B Tracking presented at Deltek’s Virtual Insight Conference held Sept. 14-15, 20. The session, entitled “DCMA Audit Survival – Preparing for Property Audits,” can be accessed onDemand and provides valuable background on the FIAR initiative, discusses the current expectations for government contractors and provides insight into the modern technology that is available to help organizations pass government property audits.