Army seeks to improve management of equipment held by contractors

Army seeks to improve management of equipment held by contractors – ALOG News

The Army has undertaken a program to improve its ability to account for Government equipment that is in the custody of contractors. The Government Furnished Equipment (GFE) Accountability Initiative is a 6-month proof of concept sponsored by the Assistant Secretary of the Army for Financial Management and Comptroller; the Assistant Secretary of the Army for Acquisition, Logistics, and Technology; and the Army G-4. Its purpose is to design the processes and business rules needed to account properly for Government equipment held by contractors. The proof of concept began in November and is scheduled to end on 30 April.

The Army must be able to report financial information on all Army property, including GFE, by 2006. However, two current practices make meeting this requirement difficult: Contractors can account for GFE using any system they choose, and they are not required to depreciate the value of the equipment over time; and Army property book officers (PBOs) drop GFE from their property books when they transfer equipment to a contractor. The GFE Accountability Initiative seeks to correct these problems.

The Army’s goal is to leave GFE on the property books and manage it at the installation level, with the Army providing accounting of the property for the contractor using the Defense Property Accountability System (DPAS). To accomplish this without undertaking the very difficult task of changing the Federal Acquisition Regulation (FAR), the Army, within FAR guidelines, is making changes to the Army Federal Acquisition Regulation and other Army regulations. These changes will place GFE on one accountability system, thereby allowing the Army to obtain annual financial data from that system instead of having to rely on the DD Form 1662, DOD Property in the Custody of Contractors, that contractors now complete.

During the proof of concept, four installations (Fort Irwin, California; Fort Rucker, Alabama; Holston Army Ammunition Plant, Tennessee; and the Army Aviation and Missile Command at Redstone Arsenal, Alabama) will provide feedback on the creation of financial records using DPAS. Once the proof of concept proves successful, the Army will extend the processes and business rules to the rest of its installations until all GFE is properly accounted for on an Army property system and reported annually on Army financial statements in accordance with the Chief Financial Officer Act of 1990; the Federal Financial Managers Improvement Act of 1996; and DOD Instruction 5000.64, Defense Property Accountability.

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