Attachment_10b_-_1-PMO_IG_v2_6.pdf

FA252119RA007

(REF) FA2521-18-R-0024

RFP Attachment 10b

Government Furnished Materiel- Accountability

Program Management Office Implementation Guide

HAF / A4LR

Version 2.6

1 November 2017

DRAFT

FA2521-18-R-0024

Instrumentation Range Support System

Attachment 10b

Revision History Version Date Summary of Changes

1.0 21 Apr 16 Initial draft

2.0 5 Aug 16 Sponsor Review Changes and cleanup

2.1 9 Sept 16 Minor changes

2.2 4 Oct 16 Monthly transaction sampling

2.3 10 Feb 17 Changes to monthly transaction sampling

2.4 28 Feb 17 Changes to Receipt, Physical Inventory, Daily GFM-related activities and Start-up activities

2.5 4 Apr 17 Changes to Reconciliation and Logistics Reassignment (internally released version)

2.6 1 Nov 17 Changes to IT requirements and document format

FA2521-18-R-0024

Instrumentation Range Support System

Attachment 10b

Table of Contents 1 Background

2 Document Purpose

3 Requirements

3.1 Contract changes

3.2 DD Form 2875

3.3 Training

3.4 CICP Designation

3.5 Defense Logistics Management Standards (DLMS)

3.6 Data Cleansing Activities

4 Process and Procedure Requirements

4.1 Perform Materiel Receipt of GFM (link to Model)

4.2 Perform Materiel Issue of GFM (link to Model)

4.3 Perform Materiel Condition Code Change of GFM (link to Model)

4.4 Perform NSN Re-Identification and Assignment of GFM (link to Model)

4.5 Perform Physical Inventory of GFM (link to Model)

4.6 Perform GFM Data Reconciliation (link to Model)

4.7 Perform GFM Financial Reporting (link to Model)

4.8 Perform Logistics Reassignment for CICP Managed Materiel (link to Model)

4.9 Perform Daily GFM-Related Activities (link to Model)

4.10 Start-Up Activities / Requirements

4.11 Inventory Adjustment, Disposal and Condemnation Authorization

4.12 Monthly Transaction Sampling

APPENDICES

Appendix A Acronyms

Appendix B Glossary

Appendix C Process Models

Appendix D Contextual Model

1 Background The Air Force implemented a method to deliver information technology (IT) capability as measured against the solution of the original problem that was brought forth by the end user. The Air Force identified the following problem:

“Air Force accountability is incomplete for contractor managed and possessed Air Force owned materiel (Operating Materials and Supplies / Spares). The Air Force is unable to track end-to-end, logistics and financial transactions; provide total asset visibility (TAV);

and report materiel inventory values accurately and timely. “

In 2013, the Air Force chartered the Government Furnished Materiel – Accountability (GFM-A) capability initiative to provide property accountability / control of contractor managed and possessed Air Force owned property (inclusive of materiel and equipment) through implementation of standard and integrated AF logistics and contractor processes (from acceptance and receipt to disposition) IAW DoDM 4140.01, DoDI

5000.64 and Financial Improvement and Audit Readiness (FIAR) Guidance. The planned capability would establish and maintain accountable inventory records for government furnished property (GFP), within a government accountable property system of record (APSR), that reflects current quantity, status, location, condition and authorizing contract while establishing an audit trail to update and track end-to-end logistics and financial transactions.

The need came about due to the Air Force out-sourcing the management activities of certain weapon system unique materiel and equipment to commercial entities with the Air Force paying for the materiel as it is acquired by the commercial entity, thus making the materiel GFM. These contractual arrangements are categorized as, but not limited to, contractor inventory control point (CICP), contractor logistics support (CLS), contractor operated and maintained base supply (COMBS), interim contractor support (ICS), performance based logistics (PBL) and/or contractor supported weapon systems (CSWS). These arrangements are hereby referred to as “Contractor” or “CICP” hereinafter. There is no waiver for reporting of contractor managed and possessed property (Operating Materials and Supplies (OM&S) spares/assets and equipment).

Contractor managed and possessed government furnished property is but one type of government furnished property and is the sole focus of this capability initiative. The above problem statement does not apply to the other types of government furnished property as the AF has solutions in place for the reporting of logistics and financial data. Only Air Force owned property will be reported in the Air Force identified GFM-A Accountable Property System of Record (AF GFM-A APSR).

2 Document Purpose The purpose of the Program Management Office (PMO) Implementation Guide is to provide PMOs and counterparts with technical and functional details needed to manage Contractors responsible for GFM-A accountability that will be using or interfacing with the AF Accountable Property System of Record (APSR). This relates to contractors who manage and possess AF owned assets, where the contractor is the inventory control point (source of supply) and must report all transactions according to AFI 23-101. The AF has selected the Defense Property Accountability System (DPAS) as the Accountable Property System of Record (APSR) for this AF initiative allowing the AF to financially account for this materiel and meet the DoD Financial Improvement and Audit Readiness (FIAR) requirements.

This implementation guide discusses processes and procedure requirements captured during the onset of the GFM-A project. Section 3, identifies Functional Requirements that the PMO is responsible for in order to successfully implement the AF GFM-A APSR to track logistic events. Section 4, Process and Procedure Requirements reviews each GFM-A process, links the processes to the Defense Logistics Management Standards (DLMS) transactions and includes the start-up activities/requirements necessary.

Throughout the document there are Appendices with links that provide additional elements to assist the contractor and/or PMO with preparations to directly use or interface with the AF GFM-A APSR.

3 Requirements This section identifies requirements that the Program Management Office (PMOs) must accomplish for the Contractor to transact in the AF GFM-A APSR. Identified below are activities that may be performed repeated or as needed. There are occasions when the PMO will delegate responsibilities to the Contractor. In cases when this is stated, the PMO remains responsible. The AF GFM-A APSR will account for all Air Force owned materiel that has an assigned National Stock Number (NSN) (including both NC and ND numbers) or Part Number. For purposes of this document, we will refer to these by Stock Number from here forward.

3.1 Contract changes

The PMO is responsible to ensure the following tasks are accomplished when a contract is terminated or expires and a new contract is let. A PMO will complete these activities before a new contract can report in DPAS.

• Request new RIC/DoDAAC to HAF/A4L (Reference CICP Designation)

• Update DD Form 2875s for DPAS users

• Establish item records for new contract number in DPAS

After a new contract is set-up in DPAS, the PMO will ensure that contractors:

• Execute shipment transactions to decrement inventory associated with expiring contract.

• Execute receipt transactions to increment inventory transferred from expiring contract to new contract.

3.2 DD Form 2875

The PMO will be responsible to ensure that DD Form 2875s are submitted for both PMO users as well as CICP users. The PMO will have an established process, to track and report all DPAS users. For example: when an old contract expires and a new contract is awarded or for purposes of on-line DPAS training the PMO will make appropriate updates for AF GFM-A APSR users.

• Identify PMO personnel responsible for approving DD Form 2875 and inform HAF/A4L

• Download DD 2875 form from DPAS website.

• New users must submit a DD Form 2875, User agreement and their recent Information Assurance

Training Certificate for access.

• When a contract expires and is renewed (new contract number), contact DPAS program office to set up new contract number in DPAS.

o Update DD Form 2875s for users

3.3 Training

PMO must identify program personnel who will serve as contractor oversight and management within DPAS. DPAS has on-line training that identifies user roles and permissions to assist with determining training requirements. See the following: https://dpassupport.golearnportal.org/

• Generate a DD Form 2875, User Acceptance form and recent information assurance training certificate required for personnel

• Assign DPAS user roles and permissions

• PMO users must complete DPAS training

3.4 CICP Designation

Contractors must have a Department of Defense Activity Address Code (DoDAAC), Source of Supply code (SOS) and Routing Identifier Code (RIC) before transacting in the AF GFM-A APSR. The contractor must have a unique RIC/DoDAAC for their inventory control point (ICP) and for each warehouse location. The Air Force will assign each CICP to a program manager identified by a unique DoDAAC in the AF GFM-A APSR. The AF program manager will be assigned a unique DoDAAC and RIC that will be used to direct the CICP’s transactions to the proper database record in the AF GFM-A

APSR.

For accountability purposes the Contractor (i.e. CICP, COMBS, CLS, etc.) must have the proper ICP codes established, without the codes, contractors cannot account for inventory in the AF GFM-A APSR.

Type of Activity Code

Description Purpose/Special Instructions

EB ICP Inventory location for customer shipments of Contractor ICP managed material. Not used for requisitioning.

ED Depot Inventory location for Contractor ICP. Not used for requisitioning.

FQ Air Force Program Managers

Assigned to Air Force organizations that have contractor inventory control points (CICPs). Used by the CICPs in DLMS transactions to route transactions to AF GFM-A APSR (DPAS)

PMOs must complete the CICP designation request process through HQ AFMC/A4R and HAF/A4LR.

The CSWS SharePoint site provides the required information under the folder: C-ICP Establishment. The following list the procedures needed:

Step 1 Program office (PO) will submit an “Authorization to Establish an Inventory Control Point (ICP)” request to HQ AFMC/A4RM. The format of this initial request letter can be found on the Contractor Supported Weapon System (CSWS) share point site at https://cs.eis.af.mil/sites/10825/default.aspx. If you do not have access to this share point site, you can send an email to the HQ AFMC/A4RM “CSWS Logistics” workflow at 401.scms.gumc.csws@us.af.mil to request a copy of the initial request letter.

Step 2 HQ AFMC/A4RM, in conjunction with HQ AF/A4LR, will evaluate the request. HQ AFMC/A4RM will respond within 30 calendar days with an approval or disapproval to

DRAFT

https://dpassupport.golearnportal.org/ https://cs2.eis.af.mil/sites/10825/default.aspx mailto:401.scms.gumc.csws@us.af.mil the program office. Disapprovals will contain rationale on why the request is being denied.

Step 3 If approved, the PO will need to follow the procedures in AFI 24-230 to:

a. Request an “ED” DoD Activity Address Code (DoDAAC) and an associated F** routing identifier code (RIC).

b. Request an “EB” DoDAAC.

c. Request an “FQ” DoDAAC for the Air Force Program Office using the same numbers as the “ED” and “EB” DoDAACs.

Step 4 The PO will prepare and submit letter-2, “Inventory Control Point (ICP) Codes for (name) Company” to “CSWS Logistics” workflow at 401.scms.gumc.csws@us.af.mil.

Format can be found on the Contractor Supported Weapon System (CSWS) share point site at https://cs.eis.af.mil/sites/10825/default.aspx. This request letter must contain the requested information or it will be returned without action.

Step 5 HQ AFMC/A4RM will review letter-2 to ensure required information to establish a DoD C-ICP has been provided. If not, letter-2 will be returned to the PO identifying what required information is missing.

Step 6 Approved requests will be forwarded to AFSC/LOME for Command, Control, Communications, and Computer (C4) Systems Requirements Development (CSRD).

This CSRD will establish the C-ICP as a DoD Source of Supply in Federal Logistics Information System (FLIS) and D043.

Step 7 AFLCMC/HIAR will execute CSRD requirement(s) and inform AFSC/LOME when requirement(s) is (are) completed/implemented. This is the date the C-ICP can access AFMC systems (D143C, D375), i.e., start executing inventory management actions such as requesting NSNs.

Step 8 Step 8 closes the loop. AFSC/LOME will provide implementation date to AFMC/A4RM. Then AFMC/A4RM will provide this date to PO.

Step 9 The PO can inform the C-ICP they can start cataloging action on peculiar item-of-supply materiel.

* It is highly recommended that the PMO begin this process upon / prior to contract award.

3.5 Defense Logistics Management Standards (DLMS)

It is anticipated that DLMS will replace the MILS standard by 2019.

• PMO will track DLMS updates and/or new DLMS changes. (Proposed DLMS Changes (PDCs) and Approved DLMS changes (ADCs))

• HAF/A4LR receives PDC and sends to AFMC/A4R and AFSPC/A4LR

• AFMC/A4R receives PDC and sends to AFLCMC

• AFSPC/A4LR and AFLCMC distributes to their respective PMOs

• PMOs send to contractors who interface with the AF GFM-A APSR

DRAFT

mailto:401.scms.gumc.csws@us.af.mil https://cs2.eis.af.mil/sites/10825/default.aspx

• Contractors provide estimated implementation dates to PMO/AFLCMC/AFSPC/AFMC.

3.6 Data Cleansing Activities

• For assets not from your source of supply – contact the source of supply and ship assets as they direct

• In-transit clean-up directed by HAF/A4L to PMO o Plan to complete before program goes to DPAS o For contractors currently interfacing with ILS-S:

Contractor submits list of open shipments to ILS-S (ILS-S to confirm receipt) Contractor receives list of open shipments from ILS-S (Contractor to confirm receipt) Contractor and ILS-S to close in-transit shipments with confirmed receipts

• Asset valuation review o All assets must have an initial asset valuation with key supporting documentation o All prices must be validated o Prices must match ILS-S and D043 (if applicable)

• Assets should only include spares listed on your contract

• Data Elements must be validated (i.e. unit of issue, ERRC, condition code, serial number (if applicable))

• Verify contractors completed 100% inventory 90 days prior to reporting to AF GFM-A APSR

• Dispose of obsolete parts prior to upload into DPAS

4 Process and Procedure Requirements The GFM-A business processes and procedure requirements section exposes functions to include PMO responsibilities. The process models represent the designed state for GFM-A functions and requirements.

Document links have been included for this section to provide the reader with detail. The PMO responsibilities section provides accountability details related to the process and/or DLMS transactions.

The DLMS transactions are provided to connect the process and the logistical event to the DLMS transaction(s) necessary for inventory accountability.

The GFM-A team worked diligently with the EBSO (fka: DLMSO) to make changes to certain DLMS transactions required by the AF GFM-A APSR. The following table lists the ADCs related to the GFM-A project. The table will assist the interfacing contractors with an association between the DLMS transactions and GFM-A processes. Both the PMO and Contractor are responsible to monitor the DLMS website for updates/changes that may impact responsibilities. The DLMS website is http://www.dla.mil/HQ/InformationOperations/DLMS/ and the DLMS Implementation Conventions and ADCs can be found here.

http://www.dla.mil/HQ/InformationOperations/DLMS/

ADC DLMS ADC Description GFM-A Transaction Flows (Functions)

ADC 1224 527R

846P 846R 867I 945A 947I

Requirements for Air Force Government Furnished Property (GFP) Accountability including Identification of the Contractor Inventory Control Point (CICP), the Physical Location of Property, the Authorizing Procurement Instrument Identifier (PIID), Disposal Information in the Issue Transaction, and Enhanced Data Content in Inventory- Related Transactions (Supply/Contract Administration)

(1) GFM-A End of Day / Month

(2) GFM-A Issue or Disposal

(3) GFM-A Materiel Release Confirmation

(4) GFM-A Physical Inventory

(5) GFM-A Inventory Adjustment

ADC 1225 527R Revise DLMS 527R Receipt Transaction for Intra-Air Force Government Furnished Property (GFP) Accountability to Include Identification of the Contractor Inventory Control Point (CICP), Addition of Moving Average Cost (MAC), and Authorization to Use Latest Acquisition Cost (LAC) and Acceptance Date (Supply)

(1) GFM-A Receipt

ADC 1226 824R Revise DLMS 824R Reject Advice Transaction in Support of Intra-Air Force Government Furnished Property- Accountability (GFP-A) (Supply)

(1) GFM-A Reject

ADC 1227 832N Update DLMS 832N Catalog Data Support Transaction to Add Catalog Data Elements for Air Force Contractor Inventory Control Point (CICP) Use under Government- Furnished Property-Accountability (GFP-A) Capability Initiative (Supply)

(1) GFM-A Catalog Data Support

ADC 1228 846P

846R 945A 947I

Revise DLMS 846P Physical Inventory Request and 846R Location Reconciliation Request to Enhance End of Day/Reconciliation Process

(1) GFM-A End of Day

(2) GFM-A Physical Inventory

ADC 1230 527R

845R 867I 945A 947I

Revise Balance Affecting Transactions to Authorize Air Force Contractor Inventory Control Points (CICP) use of Batch Number, Serial Number, and Unique Item Identifier (UII) for Air Force Government Furnished Property (GFP) Accountability (GFP-A) (Supply/Finance)

(1) GFM-A Disposal

ADC 1232 846D

846S

Revision to DLMS 846D and 846S Logistics Reassignment Transactions to Support Government Furnished Property (GFP) Accountability during Logistics Reassignment between Air Force Contractor Inventory Control Points (CICP) and Air Force or DLA ICPs (Supply)

(1) GFM-A Logistics Reassignment

ADC 1238 527R Revise DLMS 527R Materiel Receipt Acknowledgement (MRA) and Disposition Services Turn-In Receipt Acknowledgement (TRA) Transactions to Allow Air Force Contractor Inventory Control Points (CICP) to Forward Transaction Images in Support of Air Force Government Furnished Property (GFP) Accountability (Supply)

(1) GFM-A Receipt

Table 4-1, GFM-A DLMS Transactions

Note: Contractors that will interface with other AF systems beyond the AF GFM-A APSR may require more DLMS transactions.

4.1 Perform Materiel Receipt of GFM (link to Model)

Process description (link to Contextual Model) For new acquisition, authorized personnel perform acceptance of GFM using DD Form 250, Material Inspection and Receiving Report. Contractor physically receives the item and receipt documentation;

updates their contractor IT system and sends an image of the receipt transaction to AF GFM-A APSR via DAAS or self service module. AF GFM-A APSR receives receipt transaction and updates inventory balance. For new acquisitions, the contractor updates the valuation methodology and includes the new valuation in the receipt transaction update for new acquisition. The Air Force will use Deemed Cost as the initial inventory valuation methodology and moving average cost (MAC) methodology will be used after the initial inventory valuation going forward. The contractor must value the materiel under their management and possession at historical cost using the MAC flow assumption. MAC will be calculated by the contractor’s system, on a perpetual basis, and provided to the AF GFM-A APSR. Refer to DoD Financial Management Regulation 7000.14-R, Volume 4, Chapter 4, May 2009 for the definition. See inventory valuation in Section 5 below. This scenario is also triggered by the contractor receiving materiel returns from a customer.

PMO roles and responsibilities Roles and responsibilities

1. The Air Force program manager shall verify that only contractually authorized assets are loaded in the AF GFM-A APSR.

2. The Air Force Program manager may receive request for new Stock Number from CICP

3. The Air Force Program manager must complete initial data load to enter new Stock Number into

AF GFM-A APSR

• May delegate this responsibility to the CICP

4.2 Perform Materiel Issue of GFM (link to Model)

Process description (link to Contextual Model) Contractor issues, ships, or disposes an item and processes transaction within contractor’s IT system and sends an image of the transaction to AF GFM-A APSR via DAAS or self service module. The AF GFM- A APSR is updated to reflect the transaction making data available to the AF.

If the Contractor is recording a shipment transaction (DLMS 945A), the item is recorded as in-transit.

After the customer receives the shipped materiel a receipt acknowledgement is sent to contractor. The contractor processes the receipt acknowledgement from the customer (527R Materiel Receipt Acknowledgement (MRA)) or from Defense Logistics Agency (DLA) Disposition Services (DS) (527R Turn-in Receipt Acknowledgement (TRA)) to close the in-transit.

To close an in-transit, the contractor sends an image of the 527R MRA or 527R TRA to AF GFM-A APSR via DAAS or self service module. The contractor must forward MRA/TRA transactions to AF GFM-A APSR to close out in-transit balances. Contractors follow DoD policy (DLM 4000.25, Volume 2, Chapter 10) on following up on delinquent in-transit transactions.

PMO Roles and responsibilities Roles and responsibilities

1. The Air Force program manager may receive request for new Stock Number to be added to

AF GFM-A APSR or changes to item indicative details from CICP.

• Updates AF GFM-A APSR with new Stock Number or changes.

2. The Air Force program manager shall receive disposal requests from CICP (for those disposals exceeding the thresholds identified in the contract). The program manager shall provide authorization number to the CICP. The CICP includes the authorization number in corresponding disposal transaction. (Refer to Section 6)

3. The Air Force program manager reviews in-transit items in the AF GFM-A APSR and notifies CICP to follow up on in-transit items whose receipt acknowledgement is past due according to DoD policy (DLM 4000.25, Volume 2, Chapter 10).

4.3 Perform Materiel Condition Code Change of GFM (link to Model)

Contractor processes condition code change of GFM and updates inventory balances by condition code in contractor inventory system. Inventory balance change due to condition code changes are reported and updated in the AF GFM-A APSR via DAAS or self-service module.

PMO Roles and responsibilities Roles and responsibilities

1. The Air Force program manager approves requests for item condemnation from CICP, if required.

2 The Air Force program manager shall receive request for changes to item indicative details from CICP.

• Updates AF GFM-A APSR with changes.

4.4 Perform NSN Re-Identification and Assignment of GFM (link to Model)

PMO adds the new stock number into the AF GFM-A APSR. The contractor updates item indicative details and re-assigns the stock number for items in contractor inventory system. Inventory balance change due to stock number re-identification changes are reported and updated in the AF GFM-A APSR via DAAS or self-service module. For example, changes can be the result of a modification of an item to a new stock number or the change from a NC or ND number to NSN.

PMO Roles and responsibilities Roles and responsibilities

1. Receive request for cataloging actions

2. Approve the new stock number being added to the AF GFM-A APSR

• May delegate this responsibility to the CICP

3. Approve Time Compliance Technical Order (TCTO) for the re-identification

4. Receive request for new or reassigned stock number or change to item indicative details from CICP

5. Complete initial data load to enter new stock number into AF GFM-A APSR or update item indicative details in AF GFM-A APSR.

• May delegate this responsibility to the CICP

6. Receive condemnation requests from CICP (for those condemnation exceeding the thresholds identified in the contract). Provides authorization number to CICP. CICP includes authorization number in corresponding condemnation transaction. (Refer to Section 6)

4.5 Perform Physical Inventory of GFM (link to Model)

Process description (link to Contextual Model) Contractor conducts physical inventory of GFM. Physical Inventory is conducted according to the contract terms. Contractor inventory date and balance changes are reported and updated in the AF GFM- A APSR through DAAS or the self-service module using DLMS 947I transaction. May direct the contractor to perform periodic physical inventories in accordance with the contract terms or unscheduled physical inventories if the contractor fails data reconciliation (section 4.6).

PMO Roles and responsibilities Roles and responsibilities

1. Set physical inventory terms in contract.

2. Receive request for change to item indicative details from CICP.

• Update AF GFM-A APSR with changes.

• May delegate this responsibility to the CICP.

3. Complete initial data load to enter new Stock Number into AF GFM-A APSR.

• May delegate this responsibility to the CICP.

4. Send physical inventory requests to the CICP, as required.

5. Direct CICP to complete unscheduled physical inventory through the AF GFM-A APSR if balances or condition code discrepancies exist after initial physical inventory was conducted or after daily or monthly reconciliation fails.

6. Receive inventory adjustment requests from CICP, for those adjustments exceeding the thresholds identified in the contract. Provide authorization number (document number) assigned by the AF GFM-A APSR to CICP. CICP will include authorization number in corresponding inventory adjustment transaction. (Refer to Section 6)

7. Include an expected reply date for reporting on the requested physical inventory. The Physical Inventory Reply date will be based on contractual terms between the contractor and the program office. The Physical Inventory Reply date must be within the timeframe to conduct a physical inventory specified in the DLMS (MILSTRAP) procedures.

4.6 Perform GFM Data Reconciliation (link to Model)

The Air Force conducts AF GFM-A APSR transaction reconciliation daily and monthly to synchronize with the Contractor Inventory Management System. At the end of each day, all assets with a balance affecting transaction occurring that day must undergo an end of day reconciliation process. This reconciliation will include the inventory balance in the warehouse, and the in-transit balance to a customer. At the end of each month, all GFP items must undergo an end of month reconciliation process.

The reporting requirement will include all item records with or without any transactional activity during the course of the month. This reconciliation will include the inventory balance in the warehouse, and the in-transit balance to a customer. Data between the AF GFM-A APSR and the contractor inventory management system must match. *Self-service module users will not utilize this process model.

PMO Roles and responsibilities Roles and responsibilities

1. Receive notification of reconciliation failures from AF GFM-A APSR. Examples of reconciliation failures include:

• Mismatched item indicative detail

• Mismatched asset management data (balances, condition codes or price)

2. Direct CICP to perform corrective actions necessary to correct reconciliation failures

• May direct CICP to complete a physical inventory to resolve reconciliation failures

3. Receive notification from AF GFM-A APSR when CICP fails to provide daily transactions and balances or monthly balances.

4. Monitor reconciliation log to ensure contractor resolves failures within five business days of the failure notification.

5. Receive request for new Stock Number or change to item indicative details from CICP through the AF GFM-A APSR

6. Update item indicative details or completes initial data load to enter new Stock Number into AF

GFM-A APSR as required.

• May direct CICP to complete a physical inventory to resolve reconciliation failures

4.7 Perform GFM Financial Reporting (link to Model)

The AF GFM-A APSR provides the financial and logistics transactions, which contains the inventory valuation, to the financial and accounting system designated by SAF/FM.

PMO Roles and responsibilities Note: The PMO and contractor have no direct interaction with the Financial Reporting Process; the AF GFM-A APSR will aggregate the transactions and send the financial reporting data to the accounting system. To correct the financial reporting data, the contractor processes a logistics transaction in their inventory management system and provides to the AF GFM-A APSR.

Roles and responsibilities

1. View CICP inventory valuation data in AF GFM-A APSR

2. Validate CICP inventory valuation after completing initial data load and initial receipt transactions to ensure proper valuation

3. Notify CICP of possible valuation discrepancies

4. Validate Chief Financial Officer (CFO) reporting information

5. Review asset valuation in the AF GFM-A APSR

6. Receives CFO report from CICP and sends to HAF/A4L until CICP is added to AF GFM-A APSR

4.8 Perform Logistics Reassignment for CICP Managed Materiel (link to Model)

Contractor managed materiel may be logistically reassigned from the contractor to the Air Force, DLA.

When this occurs, the contractor will report the change in inventory data/balance and management responsibility changes to AF GFM-A APSR. Inventory data, management responsibility, inventory balance, and condition changes are reported and updated in the AF GFM-A APSR. THE INFORMATION PROVIDED HERE IS NOT ALL INCLUSIVE OF THE LR PROCESS. This is only the information that pertains to AF GFM-A APSR. Contact your program office and AFMC/A4R for more information on logistics reassignment.

All consumable and reparable (non-consumable) items require management oversight and control to ensure uninterrupted supply support, logistical accountability and financial accounting during the transition period. Items with Supply Condition Codes listed below do not transfer on the effective transfer date. In those instances when the items do not transfer, the contractor will retain accountability and must continue to report the items to AF GFM-A APSR until disposal or change to acceptable Condition code and accountability transfers to Gaining Item Manager (GIM). The following categories and Supply Condition Codes apply:

Note:

1. Consumable managed items with supply condition codes (SCCs) of F, H, J, K, L, M, P, Q, R, S, or V.

2. Non-consumable items in SCCs G, H, J, K, L, M, P, and Q.

The following diagram walks the reader through the Logisitics Reassignment process from a Losing Item Manager (LIM) to a GIM identifying the DLMS transactions needed to add and remove inventory from the contractor’s inventory management system and the AF GFM-A APSR. This diagram walks the reader through the Logisitics Reassignment process from a Losing Item Manager (LIM) to a Gaining Item Manager (GIM) identifying the DLMS transactions needed to add and remove inventory from the contractor’s inventory management system and the AF GFM-A APSR.

Diagram 1 – Logistics Reassignment Process

PMO Roles and responsibilities Roles and responsibilities

1. Monitor item transfer/logistics reassignment with CICP and Gaining Item Manager (GIM) (or

Losing Item Manager (LIM))

2. Receive request for changes to item indicative details from CICP.

• Updates AF GFM-A APSR with changes

• May delegate this responsibility to the CICP

3. Complete initial data load to enter new Stock Number into AF GFM-A APSR.

• May delegate this responsibility to the CICP

4. AF GFM-A APSR, notifies the AF PM if for any reason the quantities on the DLMS 947I and DLMS 846D do not match.

5. PM notifies CICP of discrepancies between the DLMS 846D and DLMS 947I transactions.

Monitor logistics reassignment reconciliation log to ensure contractor resolves failures within five business days of the failure notification.

6. Note: logistics reassignments from government ICPs to CICPs must go through a de-capitalization process to remove them from the Stock Fund that was used to fund these items while managed by the government. Once the de-capitalization and logistics reassignment processes are completed these items will need to be added to the AF GFM-A APSR.

4.9 Perform Daily GFM-Related Activities (link to Model)

The purpose of “Perform Daily GFM-A Related Activities” is to exhibit actions that an AF GFM-A APSR user in the Program Management Office may execute each day. The AF GFM-A APSR will provide the AF user with capabilities to oversee contractor performance related to asset accountability, data reliability and integrity, and data accuracy.

Certain activities must be completed on a daily basis by the PMO. Some activities may require coordination between the PMO and the CICP. The CICP roles and responsibilities for these activities are identified in the CICP requirements document.

These capabilities include:

1. Review Daily Task List

a. Review in-transit transactions

b. Coordinate on data reconciliation issues

c. Review physical inventory findings

d. Perform valuation analysis

e. Coordinate on Logistics Reassignment mismatches

f. Coordinate on Receipt rejection transactions

g. Review suspended actions for Item Indicative discrepancies

2. Review information access requests

a. Manage information access

3. Review Master Data Requirements

a. Manage contract information

b. Manage item indicative information

c. Manage supplier information

Roles and responsibilities

1. Air Force program manager ensures only contractually authorized assets are loaded in the AF GFM-A

APSR.

2. If the CICP transmits a transaction to AF GFM-A APSR identifying an asset that does not exist in the database, AF GFM-A APSR will suspend the transaction and notify the Air Force program manager via the daily task list. The program manager will research the asset and update the asset master data in the APSR, which will trigger the AF GFM-A APSR to reprocess the suspended transaction.

3. Notify CICP to research open in-transit transactions

4. Notify CICP to correct issues related to reconciliation failures

5. Notify CICP of physical inventory action recommendation(s)

6. Notify CICP of discrepancies between the DLMS 846D and DLMS 947I transactions.

7. Identifies PMO personnel responsible for approving DD Form 2875 and inform HAF/A4L

8. Completes DD Form 2875 for new account creation for the AF GFM-A APSR

9. PMO users must complete AF GFM-A APSR training before user can use AF GFM-A APSR

10. Inform HAF/A4L of changes to AF GFM-A APSR user roles and access for Program office personnel.

11. Notify HAF/A4L if delegating to the CICP the loading of item indicative details.

12. Inform and update HAF/A4L with names of the personnel from the CICP with the authority to load item indicative details into the AF GFM-A APSR.

13. Track CICP performance in terms of follow ups on in-transit transactions, correction related to reconciliation failure, correction of discrepancies between DLMS 846D and DLMS 947I and physical inventory action recommendations.

14. Create DLMS 846P to request CICP conduct physical inventory

15. Authorized users create draft DLMS 846P to request CICP conduct physical inventory

16. When a contract is terminated or expires and is renewed (new contract number), contact DPAS program office to set up new contract number in DPAS.

• Request new RIC/DoDAAC to HAF/A4L (Reference CICP Designation)

• Update DD Form 2875s for users

• Establish item records for new contract number in DPAS

17. After a new contract is set-up in DPAS, the PMO will ensure:

• Contractors execute shipment transactions to decrement inventory associated with expiring contract.

• Contractors execute receipt transactions to increment inventory transferred from expiring contract to new contract.

4.10 Start-Up Activities / Requirements

Description Both Contractors and PMOs must complete certain activities before a Contractor can begin to send or enter logistics transactions into the AF GFM-A APSR. The majority of these activities happen prior to going live on the AF GFM-A APSR and are one-time occurrences, unless highlighted within specific processes.

PMO Roles and responsibilities Roles and responsibilities

1. The Air Force will assign a unique DoDAAC to each program manager that have CICPs (FQ series DoDAAC).

DAAS will direct the CICP’s transactions to the proper database record in the AF GFM-A APSR using the

RIC/DoDAAC in the DLMS transactions. Future state – DAAS will use the DoDAAC to direct the DLMS transactions to the AF GFM-A APSR.

2. Air Force program manager must identify program personnel who will serve as contractor oversight and management within DPAS o DD Form 2875, User Agreement and recent information assurance training certificate Required for personnel o Personnel must complete DPAS training o List DPAS user roles and permission

3. Air Force program manager must notify HAF/A4L of all contractors requiring access to AF GFM-A APSR as a result of PM delegation of duties.

4. Air Force program manager must provide CICP with CICP requirements document and item “fill” format, which contains item indicative or catalog data that helps drive the AF GFM-A APSR.

5. Air Force program manager must validate initial data load in the AF GFM-A APSR

6. Air Force program manager must validate beginning balances in AF GFM-A APSR before new transactions are interfaced

7. Air Force program manager must validate in-transit beginning balances in the AF GFM-A APSR before new transactions are interfaced.

8. Air Force program manager will work with contractor to determine appropriate valuation method for items without a LAC value.

9. Air Force program manager will assist contractors with key supporting documentation to support deemed cost valuation. A memorandum for the record may be used to document the efforts undertaken to locate key supporting documentation and the deemed cost valuation.

10. Air Force program manager will store and maintain their asset valuation method for items and provide to auditors as necessary.

11. Air Force program manager will assist those programs participating in the pilot program, the following are appropriate:

o Validate and report on initial transactions.

o Validate end of financial period financial report o Provide feedback on the AF GFM-A APSR to HAF/A4LR

4.11 Inventory Adjustment, Disposal and Condemnation Authorization

PMO may establish certain financial thresholds in the contract that identify when a CICP must request approval to perform inventory adjustments, disposals and condemnations. These thresholds will require PMO authorization to perform adjustments, disposals or condemnations on these items. See Appendix C for the process flow chart of activities.

PMO Roles and responsibilities Roles and responsibilities

1. Air Force program manager sets financial threshold for inventory adjustment, disposal and condemnation requests o Threshold may be identified in contract o Threshold must be included in DPAS

2. Air Force program manager receives inventory adjustment requests from the CICP for those adjustments exceeding the thresholds identified in the contract. The Air Force program manager provides authorization number (document number) assigned by the AF GFM-A APSR to CICP. The CICP will include authorization number in corresponding inventory adjustment transaction.

3. Air Force program manager receives condemnation and disposal requests from CICP (for those disposals exceeding the thresholds identified in the contract). The Air Force program manager will provide the authorization number to CICP. CICP includes authorization number in corresponding disposal transaction.

4. DPAS will identify transactions without required authorization numbers and provide notification to PMO.

PMO will contact the CICP to resolve.

4.12 Monthly Transaction Sampling

PMOs must perform tests to assess whether appropriate supporting documentation exists and is readily available to support transactions and balances. When possible and effective, PMOs are encouraged to select dual-purpose samples, whereby documentation demonstrating the effectiveness of internal control activities and supporting transactions and balances can be addressed in one sample.

Dual purpose testing is an audit procedure that consists of both “Test of Controls” and “Substantive Tests” (Key Supporting Documentation)

Sampling Technique:

Once the sample size has been determined, the PMO should identify a sampling technique to select the items to be tested. When applying the FIAR Methodology, the following two sample techniques are recommended:

• Random: Provides a method to ensure that all items in the population have an equal chance of being selected

• Haphazard: Provides a method for selecting a representative sample without relying on a truly random process. Sample items should be selected without any conscious bias. (FIAR Guidance April 2016, pg 53)

To select a random sample, the PMO can use random number tables, random numbers generated in software such as Microsoft Excel, or random selection offered by sampling software. When using haphazard selection, be careful to avoid distorting the group of transactions picked for testing by purposely selecting certain types of transactions, such as unusual or large dollar transactions.

The Department of Defense has established double sampling plans based on three different confidence levels: 97%; 95% and 90%, see attached

Table 4.12-1 sets forth the population ranges and sample sizes required for the 97% confidence level double sampling plans.

Double Sampling Process:

A number of sample units equal to the first sample size given by the plan shall be inspected. If the number of defects found in the first sample is equal to or less than the first acceptance number, the lot or batch shall be considered acceptable. If the number of defects found in the first sample is equal to or greater that the first rejection number, the lot or batch shall be rejected. If the number of defects found in the first sample is between the first acceptance and rejection numbers, a second sample of the same size shall be inspected.

The number of defects found in the first and second samples, shall be accumulated. If the cumulative number of defects is equal to or less than the second acceptance number, the lot or batch shall be considered acceptable. If the cumulative number of defects is equal to or greater than the second rejection number, the lot or batch shall be rejected.

PMOs should base the decision as to whether to use a single or double sampling plan for a given process test given the tradeoff between the administrative difficulty and the average sample sizes of the plan.

The PMO is required to verify the following actions to validate detail transaction activity for the CICPs:

1. Obtain (Run) the CFO report with transaction level detail for all activities for the respective time period

2. Establish the sample population from each category (i.e., new acquisitions, returns)

3. Select sample items from each category and request Key Supporting Documents (KSDs) from the CICP

(may be able to download themselves if KSD is attached) o Review KSDs received from CICPs and determine whether they accurately support the selected transactions in the sample o Document results and findings

4. Sign the test plan and store in archives Table 4.12-1

Using the Sampling Plan Tables, PMOs will be able to:

• Determine the sample size for the various populations

• Determine the acceptance and rejection rates corresponding to the sample sizes

The Sampling Plan Tables assume the Double Sampling Methodology

PMO conducts the first sample, and if the number of defects exceed the acceptable amount, the PMO selects a second sample for review. If the total number of defects meets or exceeds the number noted on the table, the sample is rejected and the process tested is deemed to be inadequate. On the other hand, if the total number of defects is less than the number noted on the table, the sample is accepted and the process is deemed to be adequate.

Link to GUIDEBOOK FOR CONTRACT PROPERTY ADMINISTRATION, December 2014:

http://dodprocurementtoolbox.com/cms/sites/default/files/resources/GFP%20Guidebook%20DEC%20Fo matted%2011122014.pdf

Samples can be selected using various methods:

• Automated random sampling tools:

o Random number generator in Microsoft Excel o Websites (e.g., Randomizer.org)

• Manual random sampling processes:

o Select items within a fixed interval (e.g., every 25th item on list) http://dodprocurementtoolbox.com/cms/sites/default/files/resources/GFP%20Guidebook%20DEC%20Fomatted%2011122014.pdf http://dodprocurementtoolbox.com/cms/sites/default/files/resources/GFP%20Guidebook%20DEC%20Fomatted%2011122014.pdf

APPENDICES

Appendix A Acronyms

Acronym Definition ADC Approved DLMS Change AF Air Force AFI Air Force Instruction AFMC Air Force Materiel Command AFPAM Air Force Pamphlet AFPD Air Force Policy Directive API Application Programming Interface APSR Accountable Property System of Record CFO Chief Financial Officer CICP Contractor Inventory Control Point CIIC Controlled Inventory Item Code CLS Contractor Logistics Support COMBS Contractor Operated and Maintained Base Supply COTS Commercial Off the Shelf CSWS Contractor Supported Weapon Systems DAAS Defense Automatic Addressing System DLMS Defense Logistics Management Standards DoD Department of Defense DoDAAC Department Of Defense Activity Address Code DoDI Department of Defense Instruction DOLI Date of Last Inventory DPAS Defense Property Accountability System DS Disposition Services DSS Distribution Standard System EBSO Enterprise Business Standards Office (formally known as: DLMSO) FASAB Federal Accounting Standard Advisory Board FIAR Financial Improvement and Audit Readiness FLIS Federal Logistics Information System FY Fiscal Year GFM Government Furnished Materiel GFM-A Government Furnished Materiel-Accountability GIM Gaining Inventory Manager IA Information Asset ICA Interface Control Agreement ICP Inventory Control Point ICS Interim Contractor Support

ILS-S Integrated Logistics System-Supply INV ADJ Inventory Adjustment iRAPT Invoice, Receipt, Acceptance Property Transfer IIN Item Identification Number IMM Integrated Materiel Manager IT Information Technology KSD Key Supporting Document LIM Losing Inventory Manager LR Logistics Reassignment MAC Moving Average Cost MILS Military Standards MRA Materiel Receipt Acknowledgement NSN National Stock Number OM&S Operating Materials and Supplies PBL Performance Based Logistics PCARSS Plant Clearance Automated Reutilization Screen System PDC Proposed DLMS change PM Program Manager PMO Program Management Office RIC Routing Identifier Code S/N Serial Number SFFAS Statement of Federal Financial Accounting Standards SOS Source of Supply SCC Supply Condition Code TAV Total Asset Visibility TCTO Time Compliance Technical Order TRA Turn-in Receipt Acknowledgement UII Unique Item Identifier WAWF Wide Area Work Flow

Appendix B Glossary

Term Description Reference Accountable Property System of Record (APSR)

The government system used to control and manage accountable property records. A subset of existing organizational processes related to the lifecycle management of property; the system that is integrated with the core financial system. The APSR may also control and manage accountability records as described in Paragraph 4.5 (of DoDI 5000.64)

DoDI 5000.64, Accountability and Management of DoD Equipment and Other Accountable Property, July 21, Active Item An Air Force asset managed by a contractor inventory control point (CICP).

GFM-A

Asset Any item of economic value owned by a DoD Component or held in a fiduciary capacity under the control of a DoD Component. The item may be physical in nature (tangible) or a DoD Component may have a right to control the item (intangible). The value of a DoD asset is expressed in terms of its acquisition cost and control of the asset by particular DoD Component must be the result of a past transaction or event.

DoD 7000.14-R, DoD Financial Management Regulation, Vol 4, Chapter 1, May 2009

Asset Management Position

This information asset represents the updated inventory position sent by the contractor to the AF GFM-A APSR.

GFM-A

Contractor Inventory Control Point

A contractor that is assigned the primary responsibility for the supply chain management of unique items for the Air Force. In addition to IMM functions, an ICP may perform other logistics functions in support of a particular weapon system for the Air Force (e.g.

centralized computation of retail requirements levels and engineering tasks associated with weapon system components.)

Controlled Inventory Item Code (CIIC)

CIIC represents three separate segments of codes used to identify an item's (1) security classification and/or (2) sensitivity or (3) pilferage controls for storage and transportation of DoD assets.

These CIICs identify the extent and type of special handling required due to the classified nature or special characteristics of the item. These codes and the explanation of each code are as follows:

CLASSIFIED ITEMS CODE: A code indicating the materiel requires protection in the interest of national security in accordance with the provisions of DoD 5200.1-R, Information Security Program.

SENSITIVE ITEMS CODE: Material which requires a high degree of protection and control due to statutory requirements or regulations, such as narcotics and drug abuse items; precious metals; items which are of high value, highly technical or of a hazardous nature; and arms, ammunition, explosives (AA&E) and demolition material.

PILFERAGE CODE: A code indicating the material has a ready resale value or civilian application for personal possession and, therefore, is especially subject to theft.

DoD 4100.39-M Federal Logistics Information System (FLIS), Vol 10, Oct 2010

Defense Logistics Agency Transaction Services

Transaction Services’ mission is to receive, edit, and route logistics transactions for the Military Services and Federal Agencies.