??????????????????????????????If you’re a government contractor and want to avoid rejected payments and lost contracts, you don’t want to mess with the U.S. Department of Defense. The Pentagon mandates that all of its contractors comply with a process that leads to products being listed in the Item Unique Identification (IUID) Registry. Basically, contractors must mark all the goods that they sell to the Pentagon that have an acquisition cost of more than $5,000 and other specified assets with a global unique identification number embedded in a Data Matrix barcode.

The information required is listed in this report by the IUID deputy program manager. It includes the product’s acquisition cost, a description of the product, the product’s part number and serial number, and information about the contract between the government and the contractor. Once the product has a uniquely identified number, it can be listed in the Registry.

And what will the Department of Defense do to a contractor that doesn’t comply with its IUID Registry rules? Well, the contractor won’t go to jail like people who don’t comply with IRS rules do, but a lot of money can be lost if you don’t comply. Your shipment of goods could be rejected. The Pentagon’s payment to you could be rejected. Your entire contract could be jeopardized and your reputation tarnished. It’s also important that the procedures are performed correctly before you get to the point of rejection because corrective action can be costly, according to our blog post “Five Best Practices for Implementing IUID.”

There are numerous ways to reduce the odds that you will incur the wrath of the Department of Defense by not complying with its IUID Registry rules. Below are seven of the best practices for keeping the data on your assets compliant with the IUID Registry.

1. Separate Records:
The document “IUID Frequently Asked Questions” specifies what equipment has to be marked for submission to the IUID Registry. Besides items that cost the federal government at least $5,000, you have to mark goods that are being sold for less than that when they are “serially managed (needed to be tracked by serial number), mission essential, or controlled inventory.” The document lists other exceptions to the $5,000 rule. Keeping track of what items need to be in the IUID Registry is more difficult if you enter all the products you sell to the Department of Defense in the same financial ledger.

2. IUID Data Management Software:
Listing the value of each item, its product and serial number, who is in possession of the item (custody status), the contract linked to, how the item is marked, etc. in the IUID Registry could be a cumbersome process. Fortunately, you can purchase IUID data management software that makes it easier to organize and report this information.

3. Post The Rules:
Posting the Department of Defense’s rules about the IUID Registry in a convenient place in the office could make it easier to comply with those rules. For example, the Pentagon has forms for updating and correcting records. When custody of the asset is transferred, you have to inform your government program of this. When the asset is abandoned, donated, leased, loaned, or has some other change in its “life cycle,” the contractor has to update the records and iRAPT. There are also time rules about how quickly updates and corrections must be made.

4. Register Parts Of Assets Together:
Your company might sell complete assets as well as parts of those assets. Or your company might be the prime contractor who is using subcontractors to supply the parts. Prime contractors are responsible for making sure that assets are registered properly. It’s also advisable to create a “parent/child relationship” as you mark your assets when, for example, a major end item such as an airplane is the parent and the key trackable components are the children. The IUIDs can be registered in hierarchical order with the airplane listed first in the registry followed by its components, the subassemblies of the components, etc.

5. Understand Type of Assets Qualifying for Registration:
The Department of Defense has different rules for registering legacy assets versus registering GFP or New Acquisitions. The IUID deputy program manager’s 2011 report says there are 13,813,825 assets in the registry — 9,769,206 new items and 4,044,619 legacy items. The report details what information needs to be entered for legacy items. It is significantly different than what needs to be entered for new items since new items have contract and CLIN data associated to the registration transaction. Fast forward to June 1, 2015 and now the IUID Registry maintains 17,838,864 acquisition assets, 1,035,217 GFP assets and 9,223,807 legacy assets.

6. Secure Labels:
The IUID marking can be applied directly to an asset or via a metal identification plate that is securely fastened to the asset. Labels must be securely fastened because they’re required to be affixed for the life of the asset. An aluminum tag with a polyester or polyacrylic label is one possibility for legacy assets however the environmental conditions must be carefully assessed. An aluminum tag with a permanent adhesive is another option.

7. Double-check Unique ID:
The unique identification on the asset will have up to 50 characters that are a combination of alphabetic, alphanumeric, and numeric characters. The identification is created via part numbers, serial numbers, and other numbers and information that identify the asset. However, contractors must be careful when entering the ID in the registry. “Characters such as commas, dashes and other ASCII characters are not allowed,” says our White Paper “Submitting Data to the IUID Registry.” “Creating this code is difficult; changing data within the code presents a high risk of error.” Fortunately, IUID data management that is cloud-based and available through a web browser can be procured to avoid this problem.

Now that you have adopted seven best practices for making sure that you have complied with the Department of Defense’s rules on listing your assets on the IUID Registry you have no reason to become uneasy with DoD penalties.