Attachment_10b_-__1-PMO_Imp_Guide_v2_7_3_FINAL.docx

Government Furnished Materiel-Accountability Program Management Office Implementation Guide

HAF / A4LR

Version 2.7.3

26 August 2019

Revision History

Removed mention of Logistics Reassignment Mismatch information

4.8 Perform Logistics Reassignment for CICP Managed Materiel

Table 4-9: PMO Responsibilities – removed 4, 5 and renumbered rows (pg. 15)

4.9 Perform Daily GFM-Related Activities

Table: Review Daily Task List – removed 1. E (pg. 16) Table: PMO Roles and Responsibilities - removed 6 and renumbered rows (pg. 16-17)

Table of Contents

FA2521-19-R-A007

(REF FA2521-18-R-0024)

RFP Attachment 10b

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.

· 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 the proper Department of Defense Activity Address Codes (DoDAACs) 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 a DoDAAC for each warehouse location. Each AF program manager will be assigned a unique DoDAAC 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.

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:

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

b. Request an “EB” DoDAAC. (*one for each warehouse)

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

* 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

· 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

· Plan to complete before program goes to DPAS

· 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

· All assets must have an initial asset valuation with key supporting documentation

· All prices must be validated

· 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.

ADC 1224

PDC 1224B

527R 846P 846R 867I 940R 945A 947I

(2) GFM-A Issue or Disposal

(3) GFM-A Materiel Release Confirmation

(4) GFM-A Physical Inventory

(5) GFM-A Inventory Adjustment

ADC 1225

ADC 1225A

ADC 1227

ADC 1227A

ADC 1227B

846R 945A 947I

(2) GFM-A Physical Inventory

ADC 1230

ADC 1230A

527R 846R 867I 945A 947I

846S

(2) GFM-A Physical Inventory

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

· 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

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

· May delegate this responsibility to the CICP

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

· Updates AF GFM-A APSR with changes.

· May delegate this responsibility to the CICP

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

· May delegate this responsibility to the CICP

· May delegate this responsibility to the CICP

4.5 Perform Physical Inventory of GFM (link to 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

· Update AF GFM-A APSR with changes.

· May delegate this responsibility to the CICP.

· May delegate this responsibility to the CICP.

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

· Mismatched item indicative detail

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

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

· 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

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

· Updates AF GFM-A APSR with changes

· May delegate this responsibility to the CICP

· May delegate this responsibility to the CICP

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:

a. Review in-transit transactions

b. Coordinate on data reconciliation issues

c. Review physical inventory findings

d. Perform valuation analysis

e. Coordinate on receipt rejection transactions

f. Review suspended actions for Item Indicative discrepancies

a. Manage information access

a. Manage contract information

b. Manage item indicative information

c. Manage supplier information

PMO Roles and responsibilities

Roles and responsibilities

· 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

· 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

· DD Form 2875, User Agreement and recent information assurance training certificate Required for personnel

· Personnel must complete DPAS training

· List DPAS user roles and permission

· Validate and report on initial transactions.

· Validate end of financial period financial report

· 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

· Threshold may be identified in contract

· Threshold must be included in DPAS

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.

PMO Roles and responsibilities

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

· Review KSDs received from CICPs and determine whether they accurately support the selected transactions in the sample

· Document results and findings

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%20Fomatted%2011122014.pdf Samples can be selected using various methods:

· Automated random sampling tools:

· Random number generator in Microsoft Excel

· Websites (e.g., Randomizer.org)

· Manual random sampling processes:

· Select items within a fixed interval (e.g., every 25th item on list)

APPENDICES

Appendix A Acronyms

Appendix B Glossary

Financial Management Regulation, Vol 4, Chapter 1, May 2009

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