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  • Question

    Does the Business System rule negate the authority of the appointed Property Administrator to perform the PMS Risk Analysis? If a non-property trained Business System counterpart performs the PMS Risk Analysis how does this affect the accountability of the PA and the PA responsibilities to the CO/ACO?


    Answer

    The Business System Rule (BSR) did come with some aspects of change.  However, those changes do not include performance of risk analysis of the contractor’s property management system or the type of Property Management System Analysis (PMSA) to be performed, (i.e., a standard PMSA, which involves a plant visit and detailed testing or a limited PMSA or desk audit, which you referred to as a “document review.”)  The contracting officer evaluates and makes a determination as to whether a deficiency discovered by a functional specialist or auditor, e.g. property administrator, is a “significant deficiency” as defined by DFARS 252.242-7005Contractor Business Systems and DFARS 252.245-7003Contractor Property Management System Administration.  The contracting officer also determines if the contractor’s business system is acceptable/approved or disapproved.  Those authorities and responsibilities are different from performing a risk analysis of the contractor’s property management system and the individual processes used to meet the outcomes identified in paragraph (f) of FAR 52.245-1Government property.  There is nothing written in Business System rule that negates the authority or responsibility of an appointed property administrator performing a risk analysis of the contractor’s property management system.
     
    Performance of risk analysis is addressed in the Guidebook for Contract Property Administration (December 2014).  Chapter 12 of the Guidebook-- Identify/Determine Contractor Future Performance Risk states the following:
    Based on PMSA results and other sources of reliance, the PA [Property Administrator] shall:

    12.1. Isolate and analyze root causes, determine relationships to other risks, express performance risk in terms of probability and consequences, and be mindful of the size and scope of a contractor’s property management system in order to prioritize systems of equal risk (this includes both qualitative and quantitative analyses).

    DFARS Subpart 245.70
    —Appointment of Property Administrators and Plant Clearance Officers states in 245.7001Selection, appointment, and termination that the appointment authority shall consider experience, training, education, business acumen, judgment, character, and ethics in selecting qualified property administrators and plant clearance officers.  Individuals delegated contract administration functions to perform property administration and plant clearance represent the contracting officer and should at the very least receive the appropriate training and education relative to performing those functions.  The individual delegated the responsibility of performing property administration responsibilities in accordance with agency policy should be performing the PMSA and the risk analysis.  The risk analysis is based on findings resulting from the PMSA.  If someone is performing a risk analysis without knowledge of contractor property management system requirements or direct knowledge of the contractor’s property management system the Government’s risk may be increased since the frequency and type of audit are based on the risk that the contractor’s property management system poses to the Government.

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