Moving to Paperless GFP – A Contractor’s Property Director and the Program Office Provide Transition
Those of you who have been following the roll-out of Item Unique Identification (IUID) for Government Furnished Property know that an important milestone is looming. GFP is going paperless. Current reporting of GFP utilizing DD Form 1662 is being phased out, with migration to electronic reporting utilizing the IUID Registry a mandatory requirement beginning with the new fiscal year, October 1, 2007.
While this changeover may seem a laborious inconvenience, the rewards to both contractors and the DoD are well worth the effort. As taxpayers you should know that DD 1662 provides incomplete, non-specific data on over $100 billion in GFP, resulting in costly double counting and misappropriating. The good news for contractors is that they eliminate the annual, labor intensive DD1662 process completely.
Lydia Dawson, Procurement Analyst, USD(AT&L)/DPAP/PDI, explains the need for the transition this way: “The DD 1662 process does not enable a capability that is both in compliance with the Federal Financial Management Systems Requirement and in support of efforts to obtain and sustain a clean financial opinion, as required by the 1990 CFO Act. Therefore, a system solution has been developed, and is continuing to be refined, that will allow the capture and reporting of item data related to applicable government property in the contractors’ possession utilizing the DoD IUID Registry…I would urge you to think beyond the change process itself and consider the purpose and enabled functionality. The DD 1662 transition is the first phase in advancing toward a more progressive property management capability.”
There is help available for the transition, including classes given by the National Property Management Association (NPMA), the UID Forums, the Aerospace Industries Association (AIA) and websites such as www.uniqueid.org and www.uidsolutions.com.
A Contractor’s Perspective – Steps That Led to Transition from the DD 1662 to the IUID Registry at SAIC
At A2B we work with many property managers to help them negotiate the transition. One of those is Cinda K. Brockman, CPPM, VP and Director of Corporate Property at SAIC. Cinda was an early leader in this effort, and met the original May 31, 2006 deadline transition to the IUID Registry. Her experience will no doubt help others to organize their efforts for the extended deadline.
Early on Cinda and her staff realized that it would be necessary to break down all current property reporting in order to transition off the DD1662 and make the initial upload to the IUID Registry. The first step was to form a bi-coastal Tiger Team consisting of all of SAIC’s affected departments: Corporate Property, Procurement and Contracts.
Here are some of the steps that SAIC team implemented:
They asked all property managers to review property that was scheduled for disposition after last year’s annual inventory, and then to submit, through PCARSS (Plant Clearance Automated Reutilization Screening System), property that met certain criteria per the DD1662 transition.
They asked the property managers to review all property in the database that was originally acquired and to change it to government furnished if the items were transferred to another contract. This is to ensure that everything that goes into the IUID registry is government furnished property and not contractor acquired. They also wanted to ensure that they would get it right from one contract to another.
They downloaded history transactions for all DCMA and Non-DCMA contracts using Desktop Data Access (DDA) with an entry date >= 10/01/05. Additionally, they created a worksheet to populate the Additions/Deletions transactions for items meeting the <$5,000 and >$5,000 criteria and continued to update the data on a bi-weekly basis through May 31, 2006.
They registered all DoD PIPC by the May 31, 2006 deadline, not just items valued over $5,000, because they wanted to ensure that last year’s DD1662’s would be in balance with what was reported last year.
The registering of Corporate Property came first, followed by legacy items throughout the company.
Now that SAIC has completed the process, Cinda has a few words of caution: “It is very important to find a comprehensive solution for IUID compliance versus trying to do it alone as a company.” She noted some early frustration with the registration process, but indicates that the IUID Help Desk and the IUID Registry have responded to concerns voiced by contractors.
The IUID Program Office Perspective – Lydia Dawson’s Suggested Transition Steps
The DD 1662 is a contractor reporting requirement, so it stands to reason that the onus is on the contractor for the transition. It begins by establishing a baseline to serve as a reference point for comparison purposes once the transition is completed. The fiscal year-end DD 1662 report provides a known value and quantity for nine categories of property, and it serves as the baseline. However, not all property on the DD 1662 will require entry into the IUID Registry, therefore, it is advisable for contractors to collect the data elements required to support the upload for applicable government property items to the IUID Registry when generating the year-end DD 1662 report.
Next, the contractor must submit the data for applicable government property items into the IUID Registry. Detailed instructions regarding what items require unique identification, what data elements are mandatory or optional, and various alternatives for submitting the data to the IUID Registry are available on the UID website at www.acq.osd.mil/dpap/uid. The guidance provides several “suggestions” which are meant to encourage contractors to leverage existing identification and reporting capabilities, wherever possible, to satisfy the requirements. Reports can also be generated from the IUID Registry to verify that the data has been correctly submitted, prior to proceeding to the third step in the transition process.
Because the DD 1662 requirement is specified in contract language, the contract must be modified as part of the transition process. The guidance recommends that steps one and two be completed by the end of May so that the written request and reconciliation report can be submitted to the cognizant DoD contracting officer to validate and execute the modification or block change to the contract. During FY 2006, however, transition requests were submitted after May and contract changes were still able to be executed in time. The point is that ample time must be provided to allow for the necessary review, validation and administration of the change, particularly for requests that span many contracts and include an extensive amount of government property items.
As a side note, Lydia suggests that contractors consult the website above in order to understand when to use “virtual item unique identification” for government property in existing contracts.
IUID – At the Cutting Edge of Best Business Practice
Dr. Doug Goetz, CPPM, CF, Professor of Contract and Property Management, Defense Acquisition University puts it this way: “For years defense contractors complained bitterly about the annual September/October event in the world of Government property entitled the DREADED DD FORM 1662. It was a burden to complete a form that did not provide us really useful data/information. Contractors hated filling it out. Government Property Administrators hated having to collect and reconcile it. Bottom line – it was a form that had long outlived its usefulness. Well, get ready to cheer. The IUID requirement virtually eliminates the requirement for the defense contractor to submit the DD Form 1662 and instead now requires the use of the IUID registry.”
Just as bar code revolutionized the grocery and retail industries over the past forty years, the IUID requirement is revolutionizing accounting practices. Balance sheet certification by unique asset accountability is just around the corner and bar code pioneer David Collins, president of Data Capture Institute, predicts that it will become best practice for public company accounting within the next five years. Collins notes, “Sarbanes-Oxley requires financial report certification without proposing a method to accomplish it. UID in the private sector will become that method.”
The good news is that property managers are in the vanguard of this economic groundswell. That bodes well for their future careers opportunities.
About the author and the company
Joan Hacker is Director of Public Relations at A2B Tracking Solutions of Portsmouth, RI. As the leading provider of total solutions for bar code tracking, A2B has developed software that takes UID compliance all the way through the process, from preparation and labeling, to validation and electronic data transfer to the UID registry. Principals of A2B include founders of the bar code industry who have lead innovations in applications for 40 years. To date, A2B has completed more than 2,000 tracking installations around the world. For more information about A2B Tracking, visit www.a2btracking.com or phone (800) 733-7592.
Article Origin: The Property Professional, Volume 18.Issue 5, The National Property Management Association