DCMA Letter In Regards to Implementation of Memorandum USA002547-19

To view Mr. Brown’s letter in regards to implementation of Memorandum USA002547-19, click the link below:

http://www.e-isg.com/wp-content/uploads/2020/01/Implementing-Ms.-Lords-Direction-Mr.-Brown.pdf


Background*

On December 16, 2019, Ms. Ellen Lord, Under Secretary of Defense for Acquisition and Sustainment, released Memorandum USA002547-19. This short memo has a significant impact on many defense contractors.

One important excerpt from the memo is the following:

DCMA shall assess contractor compliance by reviewing the records and physical inventory controls within the contractors’ property management systems. This is to occur on an annual basis for systems with greater than one hundred million dollars’ worth of government property. The confidence level for these reviews shall be raised to the 97th percentile, and the populations shall include all DoD GFP at those contractor locations.

Memorandum USA002547-19, Ms. Ellen Lord

During the National Defense Industrial Association (NDIA) Government Property Systems Committee meeting, AssetWorks was provided a clarification letter from the DCMA Acting Director, Mr. Robert Brown.

Mr. Brown’s letter aims to clarify which contractors will qualify for the additional DCMA scrutiny. The letter also reassures readers that while implementation may lead to some “growing pains,” it is a challenge that will ultimately lead to greater accountability of Government property.

Summary

Who will need to adhere to the requirements established in Memo USA002547-19?

Contractors working with the Department of Defense who have reported to have at least $100 million or more of Government property (GFP and CAP) under DCMA-administered contracts.

What asset population will this affect?

The population is all DoD Government property, including Contractor Acquired Property (CAP) and Government Furnished Property (GFP). It also includes all property under the contractor’s property management system which is being assessed in the PMSA.

How will the assessments be conducted?

As of January 2020, we do not have a detailed plan on how the assessments will be conducted.

We do know that the DCMA will perform the assessments. They will review records and physical inventory controls in the contractor’s property management system at a 97% confidence level. These assessments are required to be conducted annually.


*All information provided by AssetWorks and not directly quoted from sources such as the DoD or DCMA is the opinion of AssetWorks and does not count as legal counsel by AssetWorks. For more information or clarification on these matters, please consult your first line supervisor or an employee of DCMA.

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