JOURNAL OF PROPERTY AND ASSET MANAGEMENT

Leadership Matters in Property System Transformations: Vital Signs for Facilitating SuccessDr. Craig Cook, Cochise Chapter

The Property Management System Analysis and the Equipment Management Process Maturity Model Assessment: What are they really and how are they different?

Alex N. Barenblitt, MBA, CPPM, CF, A55K, SSGB—Harbour Lights ChapterSteven F. Holland, CPPM, CF, A55K—NOVA Chapter Susan E. Morrill, PMP, A55K—NOVA Chapter

Nailing Down the Liability Issue Once and for All—Again!Tom Ruckdaschel, CPPM, CF North Texas Chapter

Dr. Douglas N. Goetz, CPPM, CF, MIAM Ohio Valley Chapter

“To Err Is Human, To Forgive Divine”, But Does the Federal Government Forgive the Loss of Government Property by Contractors in

Department of Defense (DoD) Firm-fixed-price Contracts Awarded by Sealed Bidding Under FAR Part 14?

Dr. John Wyatt, Los Angeles Chapter

The Ground and Flight Risk Clause – A clause in search of a PurposeA Thought Piece on The Interactions Between The Ground And Flight Risk Clause And The

Government Property Clause And A Couple Of Other Items!!!Dr. Douglas N. Goetz, CPPM, CF, MIAM, Ohio Valley Chapter

AUGUST 2020Vol. 5 No. 1

A Publication of the NPMA, Inc.

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THE NPMA JOURNAL OF PROPERTY AND ASSET MANAGEMENT

Volume 5, Number 1, August 2020

CONTENTS

INDEX .............................................................................................. i National Property Management Association’s Executive Board ................................................................................................... iii National Property Management Association’s Editorial Review Board .........................................................................................v Editor’s Column ................................................................................................... ix ARTICLES: Leadership Matters in Property System Transformations:.......................................................1

Vital Signs for Facilitating Success Dr. Craig Cook, Cochise Chapter

The Property Management System Analysis and the Equipment Management Process Maturity Model Assessment: .....................................................................................................11

What are they really and how are they different? Alex N. Barenblitt, MBA, CPPM, CF, A55K, SSGB—Harbour Lights Chapter Steven F. Holland, CPPM, CF, A55K—NOVA Chapter Susan E. Morrill, PMP, A55K—NOVA Chapter

Nailing Down the Liability Issue Once and for All—Again! ...................................................33 Tom Ruckdaschel, CPPM, CF North Texas Chapter Dr. Douglas N. Goetz, CPPM, CF, MIAM Ohio Valley Chapter “To Err Is Human, To Forgive Divine”, ...................................................................................45

But Does the Federal Government Forgive the Loss of Government Property by Contractors in Department of Defense (DoD) Firm-fixed-price Contracts Awarded by Sealed Bidding Under FAR Part 14?

Dr. John Wyatt, Los Angeles Chapter The Ground and Flight Risk Clause – A clause in search of a Purpose .................................63

A Thought Piece on The Interactions Between The Ground And Flight Risk Clause And The Government Property Clause And A Couple Of Other Items!!!

Dr. Douglas N. Goetz, CPPM, CF, MIAM, Ohio Valley Chapter

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National Executive Board

National President Bill Franklin, CPPM

Noblis Inc. Executive Vice President Vacant Immediate Past President Cinda Brockman, CPPM, CF Vice President of Administration Jessica Dzara, CPPM, CF Loudoun Water Vice President of Certification Cathy Seltzer, CPPM, CF Engility Vice President of Communications & Marketing Kimberly A. Saeger, CPPM, CF Raytheon Missile Systems Vice President of Finance Robert Kaehler, CPPS CGI Federal Inc.

Vice President of Membership Ivonne Bachar, CPPM, CF Stanford University Vice President of Parliamentary Procedures Loril Stephens, CPPM, CF KBR Global Asset Management Vice President of Professional Development Tara Miller, CPPM, CF Apache Logical, JV Vice President - Central Region Ken Black, CPPM, CF Texas Department of Transportation Vice President - Eastern Region Wes Carter, CPPM, CF Vice President - Western Region Amanda Jensen, CPPM, CF Raytheon Missile Systems

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The Property Professional Editorial Staff

NATIONAL EDITOR: Billie Jo Perchla, CPPM, CF

MANAGING EDITOR: Keith Record, CPPM

CENTRAL REGION EDITOR: Scott Petersen, CPPM, CF

EASTERN REGION EDITOR: Toby V. Bell, CPPM

WESTERN REGION EDITOR: Glenda Steffenhagen-Poole, CPPM, CF

EDITOR EMERITUS: Dr. Douglas Goetz, CPPM, CF

NPMA Journal of Property and Asset Management JPAM

EDITOR: Dr. Douglas N. Goetz, CPPM, CF, MIAM

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© 2020 NPMA Inc.

National Property Management Association (NPMA) 3525 Piedmont Road Building 5, Suite 300 Atlanta, GA 30305 P: 404-477-5811 F: 404-240-0998

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Editor’s Column Ladies and Gentlemen: This is one of the things I do for LOVE!!! Throughout my involvement with the NPMA I have always encouraged the membership to write! From my early days as a simple contributor, to helping Ms. Sara Helmick Weaver when she was the National Editor, to my days as the National Editor I have always “pushed” for our members to write – to create a body of knowledge for our members to be able to call upon when they need clarification or answers or intellectual growth. With that said – this is a real culmination of those efforts! Welcome to this 2020 edition of the NPMA Journal of Property and Asset Management, the NPMA JPAM! This issue of the JPAM presents to our profession five wonderful articles. The authors in this edition are:

Dr. Craig Cook Mr. Alex N. Barenblitt, MBA, CPPM, CF, A55K, SSGB Mr. Steven F. Holland, CPPM, CF, A55K Ms. Susan E. Morrill, PMP, A55K Mr. Tom Ruckdaschel, CPPM, CF Dr. John B. Wyatt III Dr. Douglas N. Goetz, CPPM, CF, MIAM

I am impressed as to the depth and breadth of the articles – and the intellectual diversity of authors who submitted them. Dr. Craig Cook provides us an analysis of Leadership – and its impact on Property Managers and Property Management Organization. A topic we can all learn about and apply in our everyday work world! Mr. Alex N. Barenblitt, Mr. Steven F. Holland, and Ms. Susan E. Morrill provide a wonderful comparative analysis of the Federal Acquisition Regulation (FAR) based Property Management System compliance requirement, commonly referred to as a Property Management System Analysis (PMSA), with the ASTM International Standard, E2452-12 (2019), Standard Practice for Equipment Management Process Maturity (EMPM) Model. Two different approaches, both seeking an end result of continuous improvement! Mr. Tom Ruckdaschel and Dr. Douglas Goetz do a deep dive on the issue of Liability for loss of Contract Government property – with historical evidence provided as to the U.S. Federal Government’s policy’s efficacy, walking us through how it is applied – and in the simplest terms – who does what, when and how. As a comparative approach and from a more legalistic perspective, Dr. John B. Wyatt III provides a detailed analysis of the Federal Acquisition Regulation’s (FAR) and the DoD FAR

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Supplement on liability for the loss of Government property in the possession of contractors. Dr. Wyatt’s writings always push the reader to think deeply about our profession. Two different perspectives on Liability! Both of which provide great insight into this wonderful topic. The last article – reserved for those of you that deal with the acquisition of aircraft for the Department of Defense – An analysis of a clause that I know is near and dear to your heart, he said with a smile -- The Ground and Flight Risk Clause. There are some interesting issues presented here! Some that the original writers of the policy and clause probably never considered. My congratulations to the authors and to the NPMA as the JPAM continues to grow in depth and breadth. BRAVO to all! Ladies and Gentlemen, you have in front of you Volume 5, Issue 1 of the JPAM. I encourage you to read deeply!

Dr. Douglas N. Goetz, CPPM, CF Editor, The Journal of Property and Asset Management (JPAM)

Leadership Matters in Property System Transformations: Vital Signs for Facilitating Success

By Dr. Craig Cook, Cochise Chapter

Purpose The purpose of this article is to promote the use of Lean Practices as a means of

expanding the adequacy of, and creating the velocity for, continuous Property Management System improvements. Introduction

The organizational demands of Property Managers may forever remain

unchanged: increase efficiency, maximize margins, enhance productivity, while simultaneously mitigating compliance risks, increasing customer satisfaction, and to accomplish all of these requirements expediently without alienating employees (De Vries, 2015; Merlino, Petit, Weisser, & Bowen, 2015). Without full awareness of the context and influence of leadership behaviors necessary to implement goals, scarce are those leaders who stand a chance at achieving these organizational outcomes, let alone sustaining them (Higgs & Dulewicz, 2016). Perhaps the crux of the matter is not who, rather how to actualize these expectations. Enter Lean practices: the core concept of Lean practices being to maximize customer value while minimizing waste along entire value streams (Rother & Shook, 1999; Shook, 2015a).

The central issue for many Property Management Organizations is not taking on responsibility for improving their Property Management System. The core challenge is influencing disparate functional groups and a multitude of individual stakeholders to establish and take on accountability of compliant Property workflows. Achieving success with the myriad of requirements levied on Property Organizations predicates that stakeholder workflows be clearly defined, have dedicated owners, and performed with flawless handoffs with their Property Management organizations. Taking on this core challenge necessitates Property Organizations to evaluate, if not embrace, Lean Practices.

Despite nearly 40 years of recognition as a best-practice approach for continuous process improvement and intervention, the need for organizations to implement Lean practices has triggered spirited debates (Amer, & Shaw, 2014; Radnor & Boaden, 2008). No approach adopted by organizations have been so misunderstood, narrowly focused, and immersed in unsustainable misconceptions, as Lean transformation practices. Perhaps, organizations have viewed both the entry barrier and lure of Lean, based on the proper style of leaders that are available for planning, execution, and sustainment of the transformation. At the point an organization resolves to embrace a lean practices as a

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means of meeting expected outcomes, the focus should not be on if an organization should adopt Lean, the focus should be on who was leading the Lean implementation (Ravangard, Karimi, Farhadi, Sajjadnia, & Shokrpour, 2016), and which behaviors promote a successful outcome.

The remaining portion of this article provides excerpts of a study, conducted by this author, and focused on the individual leadership behaviors most likely to enable a successful lean transformational outcomes. These success-enabling behaviors are also the core behaviors believed as essential for successfully influencing disparate functional groups and multitude individual stakeholders to establish and take on accountability of compliant Property workflows. Individuals currently demonstrating or having the potential to easily adopt these behaviors should be considered the focal-point for accountability and handoff coordination within Property Management Organizations. Summary of Study and Findings

The problem was that it is not known if there was a relationship between

transformational leadership and the outcome of Lean transformation. Therefore, the intention of this study was to address applied leadership practices on Lean transformations, an approach often embraced by leaders held to account for delivering breakthrough organizational improvements. However, a persistent gap exists in understanding if, or to what extent, leadership style correlates with the outcome of an organization’s Lean transformation (Reichenpfader, Carlfjord & Nilsen, 2015). The results of a quantitative correlational study examined the degree relationships exist between/among the variables of transformational leadership behaviors and the Lean transformation outcomes.

A total of five paired comparisons of continuous variable relationships were analyzed (variables 1-5 were the transformational leadership behavioral factors, each paired with the Lean Transformation Outcome – variable 6). The study examined each variable relationship in the context of a respondent’s experience, measuring positively and negatively perceived Lean implementation efforts. A simultaneous examination of the multivariate relationship of all transformational leadership factor (TLF) variables assisted in clarifying the relative importance and influence on the Lean Transformation Outcome.

V1: Individual Consideration (IC) – leaders demonstrate genuine concern for follower’s needs and feelings, coaching and developing them as a means of optimizing performance.

V2: Idealized Influence – Attributes (IIA) – leaders as the ideal role model, building trust with followers.

V3: Idealized Influence Behaviors (IIB) – leaders as the ideal role model, acting with integrity.

V4: Inspirational Motivation (IM) – leaders who inspire, motivate, and encourage followers.

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V5: Intellectual Stimulation (IS) – leaders who encourage follower innovation and creativity as means of optimizing performance.

V6: Lean Transformation Outcome (LTO) – three outcomes of leadership measured by the results of the survey. The MLQ-R used three scales to measure the outcome of leadership (three items for extra effort, four items for effectiveness, and two items for satisfaction), using the validated instruments scores for leader achievements, enabled a consolidated total average score for LTO.

Overall, results indicated significant associations as each individual

transformational leadership behavior presented significant correlation ranging from .852 to .954 using Pearson’s correlation coefficients. All five transformational leadership variables that were analyzed with the Lean transformation output presented with a positive linear relationship. Consequently, as the value of Lean Transformation Outcome increased, so did the values of each transformational leadership variable (IC, IIA, IIB, IM, and IS). Each individual transformational leadership variables (IC, IIA, IIB, IM, and IS) presented significant correlation. IIB, and IM, presented high correlation and a clearly distinct relationship with Lean outcomes. IC, IIA, and IS presented very high correlation and a solid relationship with Lean Outcomes.

For Property Management Organizations looking for answers on how best to shape their improvement efforts, the use of Lean Practices as a means of expanding the adequacy of, and creating the velocity for, your continuous Property Management System improvements may be the answer. The analysis of current leader capabilities of the three leadership behaviors will enable property executives and human resource management in organizations to recruit, hire, and retain Property leaders most likely to deliver desired results. This Property Leadership Capability Analysis should include all five, but at a minimum those three leader behaviors intrinsically linked to transformational success – they are:

Variable 1: Individual Consideration (IC) – leaders who demonstrate genuine concern for follower’s needs and feelings, coaching and developing them as a means of optimizing performance. Variable 2: Idealized Influence Attributes (IIA) – leaders as the ideal role model, building trust with followers. Variable 5: Intellectual Stimulation (IS) – leaders who encourage follower innovation and creativity as means of optimizing performance.

The study results may be used to promote a broader understanding of areas where

focused training and development of Property Management leaders may be practical. Therefore, the study may enhance the accuracy of forecasting appropriate resource skills and requirements and fostering broader understanding/identification of gaps, which apply to Property Management System success. The desired outcome of this article was to embolden Property Organizations to adopt Lean practices as a means of improving the

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adequacy of Property practices, and to enable those organizations to recruit, hire, and retain leaders most likely to deliver desired Lean transformation results – enabling needed improvements of Property Management Systems.

A copy of the full study can be made available upon request.

Additional Conclusions and More on the Results

Using the data from this study, a conclusion may be drawn that Lean outcomes improved significantly as leader’s encouraged innovative thinking. The data advanced scientific knowledge by demonstrating that follower’s view leaders of successful Lean transformations as coaching/developing people, encouraging innovative thinking, building trust, acting with integrity, and encouraging others, in that order of associated strength of relationships. Further, the data indicated that leaders of successful Lean transformations exhibit those behaviors more often than the leaders of unsuccessful Lean transformations.

The data indicated that follower’s view leaders of successful Lean transformations as coaching/developing people, encouraging innovative thinking, building trust, acting with integrity, and encouraging others, in that order of associated strength of relationships. Further, the data indicated that leaders of successful Lean transformations exhibit those behaviors more often than the leaders of unsuccessful Lean transformations. Therefore, elevating the understanding and importance of those actions may be used to develop and promote value added organizational training and development campaigns that provide leaders these practical skills.

A cause-and-effect relationship was not the intent of this study based on time restrictions, organizational permissions, and limited data gathered in support of a non-experimental research. Regardless, this research data indicated substantial relationships with the behaviors of coaching/developing people, encouraging innovative thinking, building trust, acting with integrity, and encouraging others, and each are indicative of leader behaviors demonstrated on successful Lean transformations. Organizations should consider using these results to evaluate and develop necessary resource skills tailored to key transformational leadership roles. Methods of leader assessments may be altered to identify gaps and promote professional development efforts, which apply to Lean implementation success. Further, one of the desired outcomes of this research was to embolden organizations to adopt Lean practices. This data may enable those organizations interested in pursuing Lean, to recruit, hire, and retain leaders most likely to deliver desired Lean transformation results.

Data indicated a favorable alignment between the study variables and the theoretical foundation used for this research. Specifically, the transformational leadership behaviors and the Theory of Management and System of Profound Knowledge (Deming, 1986, 1993) were ideally suited for the study. Management practices, or leadership behavior,

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are linked in determining outcome (Deming, 1986) of change management initiatives. The correlation between transformation leadership behaviors and LTO improved the knowledge on these topics, specifically contributing to what Kelsey et al. (2014) noted as an emerging need to study leadership skills and behaviors that promote improved Lean management practices.

The data also identified that follower’s view a leader who coached/developed people (IC), and who encouraged innovative thinking (IS), with the highest correlation for successful Lean transformations. Although a distinct relationship was manifest with leaders who built trust (IIA), acted with integrity (IIB), and encouraged others (IM), leaders who coached/developed people and encouraged innovative thinking, were unique in demonstrating stronger associations with successful Lean outcomes. This research data does not enable a clear explanation of why leaders who coached/developed people and encouraged innovative thinking had a stronger association with successful LTOs. Why both IC and IS were set apart with more substantial relationships as compared to the remainder of the continuous variables, may require further examination to avoid speculation. It is assumed that an aging workforce with employees opting to take early retirement may lead to increased follower appreciation for the time leaders use as development opportunities, and followers being encouraged to take more innovative approaches. Perhaps examining organizations who have applied each of the TLF’s using Shook (2015b) LTM will provide greater insight.

The first of the continuous variables evaluated, indicative of transformational leadership behavior, was the IC factor. IC characterizes leaders who provide a supportive climate in which they listen carefully to the individual needs of followers; leaders act as coaches and advisors while assisting followers in becoming fully actualized (Northouse, 2015). According to Shook (2015a) leaders who demonstrated IC behaviors coupled with the other TLF’s were more likely to have an optimized LTO.

There was a statistically significant relationship between IC scores and LTO scores. Therefore, it is appropriate to reject the null hypothesis and accept the alternative hypothesis: there was a relationship between IC and the outcome of Lean transformation. These results indicated that leaders of successful LTOs were coaching and developing people more often than leaders of unsuccessful LTOs. Hence, the results of this study have confirmed Shook’s assertion that individual consideration demonstrated by leaders of Lean transformations are more likely to enable a successful Lean transformation. This assertion is supported by the substantial relationship manifest using the Pearson’s correlation coefficient (r was .931), where the strength of association between IC and LTO was very high indicating a solid relationship. Using the data from this study, a conclusion may be drawn that Lean outcomes improved significantly as leader’s coached and developed people.

The second of the continuous variables evaluated, indicative of transformational leadership behavior, was the Idealized influence – attribute (IIA) factor. Idealized influence describes leaders who act as strong role models for followers; followers

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identify with these leaders and want to emulate them because they provide followers with a vision and a sense of mission (Northouse, 2015). Although similar to IIB, IIA deliberately characterizes leaders who build trust. According to Shook (2015a) leaders who demonstrated IIA behaviors coupled with the other TLF’s, were more likely to have an optimized LTO.

There was a statistically significant relationship between idealized influence – attribute scores and LTO scores. Therefore, it is appropriate to reject the null hypothesis and accept the alternative hypothesis: there was a relationship between II-A and the outcome of Lean transformation. These results indicated that leaders of successful LTOs were those who built trust more often than leaders of unsuccessful LTOs. Hence, the results of this study have confirmed Shook’s assertion that II-A demonstrated by leaders of Lean transformations are more likely to enable a successful Lean transformation. This assertion is supported by the substantial relationship manifest using the Pearson’s correlation coefficient (r was .865), where the strength of association between IIA and LTO was high with a distinct relationship. Using the data from this study, a conclusion may be drawn that Lean outcomes improved appreciably as leader’s built trust.

The third of the continuous variables evaluated, indicative of transformational leadership behavior, was the idealized influence-behavior (IIB) factor. Idealized influence describes leaders who act as strong role models for followers; followers identify with these leaders and want to emulate them because they provide followers with a vision and a sense of mission (Northouse, 2015). Although similar to IIA, IIB explicitly characterizes leaders who act with integrity. According to Shook (2015a) leaders who demonstrated IIB behaviors coupled with the other TLF’s, were more likely to have an optimized LTO. There was a statistically significant relationship between idealized influence – behavior scores and LTO scores. Therefore, it is appropriate to reject the null hypothesis and accept the alternative hypothesis: there was a relationship between II-B and the outcome of Lean transformation. These results indicated that leaders of successful LTOs were those who acted with integrity more often than leaders of unsuccessful LTOs. Hence, the results of this study have confirmed Shook’s assertion that II-B demonstrated by leaders of Lean transformations are more likely to enable a successful Lean transformation. This assertion is supported by the substantial relationship manifest using the Pearson’s correlation coefficient (r was .861), where the strength of association between IIB and LTO was high with a distinct relationship. Using the data from this study, a conclusion may be drawn that Lean outcomes improved appreciably as leaders acted with integrity.

The fourth of the continuous variables evaluated, indicative of transformational leadership behavior, was the IM factor. IM characterizes leaders who communicate high expectations to followers, inspiring them through motivation to become committed to and a part of a shared organizational vision (Northouse, 2015). According to Shook (2015a) leaders who demonstrated IM behaviors coupled with the other TLF’s were more likely to have an optimized LTO.

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There was a statistically significant relationship between IM scores and LTO scores. Therefore, it is appropriate to reject the null hypothesis and accept the alternative hypothesis: there was a relationship between IM and the outcome of Lean transformation. These results indicated that leaders of successful LTOs were those who encouraged others more often than leaders of unsuccessful LTOs. Hence, the results of this study have confirmed Shook’s assertion that IM demonstrated by leaders of Lean transformations are more likely to enable a successful Lean transformation. This assertion is supported by the substantial relationship manifest using the Pearson’s correlation coefficient (r was .832), where the strength of association between IM and LTO was high with a distinct relationship. Using the data from this study, a conclusion may be drawn that Lean outcomes improved appreciably as leaders encouraged others.

The fifth of the continuous variables evaluated, indicative of transformational leadership behavior, was the IS factor. IS characterizes leaders who stimulate follower creativity and innovation and to challenge their beliefs and values (Northouse, 2015). According to Shook (2015a) leaders who demonstrated IS behaviors coupled with the other TLF’s were more likely to have an optimized LTO.

There was a statistically significant relationship between IS scores and LTO scores. Therefore, it is appropriate to reject the null hypothesis and accept the alternative hypothesis: there was a relationship between IS and the outcome of Lean transformation. These results indicated that leaders of successful LTOs were encouraging innovative thinking more often than leaders of unsuccessful LTOs. Hence, the results of this study have confirmed Shook’s assertion that individual consideration demonstrated by leaders of Lean transformations are more likely to enable a successful Lean transformation. This assertion is supported by the substantial relationship manifest using the Pearson’s correlation coefficient (r was .929), where the strength of association between IS and LTO was very high indicating a solid relationship.

All five transformational leadership variables that were analyzed with the Lean transformation output presented with a positive linear relationship. Consequently, as the value of LTO increased, so did the values of each transformational leadership variable (IC, IIA, IIB, IM, and IS). Each individual transformational leadership variables (IC, IIA, IIB, IM, and IS) presented significant correlation. IIB, and IM, presented high correlation and a clearly distinct relationship with Lean outcomes. IC, IIA, and IC presented very high correlation and a solid relationship with Lean Outcomes.

Overall, results indicated significant associations as demonstrated by the Pearson’s correlation coefficients. Further, each continuous variable paired with the outcome variable demonstrated a linear relationship. The data analyses illustrated that each individual transformational leadership behavior (IC, IIA, IIB, IM, and IS) presented significant correlation. IIB, and IM, presented high correlation and a clearly distinct relationship with Lean outcomes. IC, IIA, and IC presented very high correlation and a solid relationship with Lean Outcomes.

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References

Amer, H., & Shaw, C. (2014, November). Lean leadership paradoxes: A systematic literature. Paper presented at the Fifth International Conference on Engineering Project, and Production Management, Port Elizabeth, South Africa. Retrieved from http://www.eppm2014.nmmu.ac.za.

Avolio, B. J., Bass, B. M., & Jung, D. I. (1999). Re-examining the components of transformational and transactional leadership using the multifactor leadership. Journal of Occupational and Organizational Psychology, 72(4), 441-462.

Bass, B. M. (1985). Leadership and performance beyond expectation. New York: Free Press.

Bass, B. M., & Stogdill, R. M. (1990). Handbook of leadership (Vol. 11). New York: Free Press.

De Vries, H. (2015). The influence of Lean thinking on discrete manufacturing organizational structure and behavior (Doctoral dissertation). Retrieved from http://www.uir.unisa.ac.za.

Deming, W. E. (1986). Out of the crisis. Cambridge: Massachusetts Institute of Technology, Center for Advancing Engineering Study.

Deming, W. E. (1993). The new economics: For industry, government, education. MIT press.

Deming, W. E., & Orsini J. (2013). The essential Deming: Leadership principles from the father of quality. New York, NY: McGraw-Hill.

Higgs, M., & Dulewicz, V. (2016). The leadership context. Leading with emotional intelligence. Springer International Publishing, 2016. 105-127.

Kelsey, C., Allen, K., Coke, K., & Ballard, G. (2014). Lean in and lift up: Female superintendents share their career path choices. Journal of Case Studies in Education, 6, 1.

Merlino, J. P., Petit, J., Weisser, L., & Bowen, J. (2015). Leading with Lean: Getting the outcomes we need with the funding we have. Psychiatric Quarterly, 86(3), 301-310.

Northouse, P. G. (2015). Transformational Leadership. In L. Larson & K. Bierach (Eds.), Leadership: Theory and practice (pp. 161-194). Thousand Oaks, CA: Sage publications.

Radnor, Z., & Boaden, R. (2008). Editorial: Lean in public services—panacea or paradox? Public Money & Management, 28(1), 3-7. doi:10.1111/j.1467-9302.2008.00610

Ravangard, R., Karimi, S., Farhadi, P., Sajjadnia, Z., & Shokrpour, N. (2016). The effects of transformational leadership and mediating factors on the organizational success using structural equation modeling: A case study. The Health Care Manager, 35(1), 58-71.

Reichenpfader, U., Carlfjord, S., & Nilsen, P. (2015). Leadership in evidence-based practice: A systematic review. Leadership in Health Services, 28(4), 298-316.

Rother, M., & Shook, J. (1999). Learning to see: Value-stream mapping to create value and eliminate muda. Cambridge, Massachusetts: Lean Enterprise Institute.

Shook, J. (2015a). Lean transformation model [Video file]. Retrieved from http://www.Lean.org.

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Shook, J. (2015b). How the Lean transformation model works: Developing a continually learning and improving system model. Presented at the Lean Leadership Development Program Conference on Lean transformation, Cambridge, MA. Paper retrieved from http://www.michiganLean.org.

The Article content derived from a Dissertation with a Similar Title: Leadership Matters in Lean Transformation: Vital Signs for Facilitating Success

By Dr. Craig Cook

BIO Dr. Craig Cook is a Property Operations Manager for Raytheon in Tucson, Arizona. Working in his current role for the past two years, Dr. Cook has worked for Raytheon for nearly 7 years as a Material Program Manager and Strategic Enterprise Acquired Commodities. Dr. Cook has worked for nearly a decade as a Management Consultant with Price Waterhouse and PricewaterhouseCoopers, and over a decade as an employee of Toyota Motor Corporation in Operations, Manufacturing Engineering, and Supply Chain roles. His doctoral discipline is in Leadership and Organizational Development. Dr. Cook is a practicing catholic, and Veteran of the First Persian Gulf War. He has been married for 28 years and has three children.

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The Property Management System Analysis and the Equipment Management Process Maturity Model Assessment: What are they

really and how are they different?

Alex N. Barenblitt, MBA, CPPM, CF, A55K, SSGB—Harbour Lights Chapter

Steven F. Holland, CPPM, CF, A55K—NOVA Chapter Susan E. Morrill, PMP, A55K—NOVA Chapter

Abstract

Several approaches exist for auditing and assessing business systems, in general, and property management systems (PMS), in particular. Each approach has its purpose, merits, and shortcomings. No single approach is perfect in all respects, and each supplies useful information to leadership for decision-making. An audit confirms compliance and adequacy, whereas an assessment gains a deeper understanding of the PMS.

Two of these approaches are property management system analysis (PMSA), also called a property audit, and the Equipment Management Process Maturity Model (EMPM) assessment. LMI uses the latter approach under our Property Maturity Assessment Program™ (PMAPTM) service offering. The PMSA approach follows guidance from the Department of Defense Guidebook for Contract Property Administration,i the Defense Contract Management Agency (DCMA) Guidebook for Government Contract Property Administration,ii and other resources. ASTM International Standard, E2452-12 (2019), Standard Practice for Equipment Management Process Maturity (EMPM) Model, describes the standard EMPM assessment approach in detail.

These two approaches ensure that government property is managed well, by a federal agency or department or its contractors who have stewardship and custody of government property. Managed well means that government property under the custody of the organization is cared for and accounted for responsibly.

The PMSA approach is applied to federal and defense contractors when DCMA or other cognizant oversight authorities perform property audits as required by FAR 45.105. Government property administrators (GPAs) conduct these property audits to maintain oversight, evaluate whether a PMS is adequate or inadequate (satisfactory or unsatisfactory) and uncover defects. Prime contractors use this approach on their subcontractors for property audits to maintain surveillance and oversight. This requirement to audit subcontractors in possession of government property from the prime is a contractual flow-down requirement.iii Internal or external oversight auditors follow a similar approach when examining an agency’s or department’s PMS.

Many federal statutes, regulations, and contract requirements may be applicable, and policies, processes, and procedures must be published and followed.iv,v Detailed records of property throughout its lifecycle must be maintained to achieve acceptable accuracy and dependability of the records and reports derived from the data. The records and source documents must be available for review or inspection.

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An EMPM assessment approach is not required by regulation or in contract language. However, this approach can be informative, resulting in useful information for action: Does a written procedure capture every step that is performed, consistently, or steps that are performed that have been adopted informally over time? Is there a trend or pattern of metrics which collectively signal a problem or risk not otherwise detected when examined individually? Are some parts of a process compliant but with needless steps? Can additional processes improve readiness results? Many of the processes and techniques employed for a PMSA can be part of an EMPM assessment, along with other investigative methods suitable for the organization and asset management portfolio.

This paper describes the PMSA audit and EMPM assessment approaches, comparing their strengths and shortcomings. This paper focuses on tangible personal property, but these approaches can be expanded to include other forms of property. For instance, for an audit of property in the custody of contractor, software and real property could be included under appropriate circumstances. An audit of property in the custody of a federal agency could include other forms of property, such as real property, internal use software, or inventory and related property. Recognizing the scope of the review and what is included in the PMSA or EMPM assessment is one of the first steps in each process.

Introduction

The perspectives on property management for the financial management, facilities management, logistics management, internal controls, compliance, and property management functional elements regarding a PMS are different from each other, but each function is critical and interdependent.

For instance, financial management needs to ensure record accuracy for existence and completeness for financial accounting, financial statements, and business operations reporting. Facilities management supplies building information like building numbers, room numbers, and cubicle numbers for office space locations that relate to the location fields in the asset management system of record. Logistics management assists in accountability of property and maintains location control of equipment and materials stored in warehouses and distribution to ensure the right property is in the right location, at the right time, and in the right condition to meet organization and mission requirements, while improving continuously to minimize waste, costs, and risks. Internal controls and compliance confirm that policies and procedures are followed and test record completeness, accuracy, and compliance with regulations, statutes, and applicable contract requirements. Property management must also ensure record accuracy for existence and completenessvi and that property is authorized and necessary for acquisition and use, etc., throughout the entire property lifecycle. This is at the heart of compliance.

In addition to the compliance responsibility, property management’s principal mission is to improve efficiency and effectiveness of the PMS continuously, while anticipating and mitigating risks. All its policies, procedures, and processes support this mission. By ensuring efficient and effective property management, the results required by the financial management and internal controls organizations will be met.

Several approaches can ensure meeting these requirements. Property policies, processes, procedures, and record accuracy needs to be examined regularly and independently, while serving the different perspectives of each function. No single audit or assessment approach is the

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best or only valid way to perform an evaluation of a PMS in its entirety, from all perspectives. Each approach has value and limitations. A PMSA is required by regulation or contractual terms. Other approaches, such as an EMPM assessment, may not be required but, as a voluntary consensus standard (VCS), are permitted and encouraged for government propertyvii,viii and are informative and useful.

The interdependence of multiple functions or departments in an organization with respect to assets or property is frequently unrealized or misunderstood. The financial management and property management functions depend heavily on each other yet have different perspectives on property. Neither is more important or less important than the other—both are critical functions for every organization, with their own roles, influenced by and influence on each other.

Financial management’s role with respect to property management is to ensure that property records reflect what property exists, supported by current, complete, and accurate records. The records must include source documents, such as purchase orders, transfer forms, receiving and shipping documents, and vendor invoices. They document necessary details about the property, including the unit acquisition cost of each item throughout the property management lifecycle.

In the property management lifecycle, we refer to the acquire-to-retireix,x business process. This is the period from when the need for property is identified, through its acquisition, storage, use, maintenance, and eventual transfer or disposition. Financial management relies on the accuracy of the property records and reports from property management to report information on the organization’s financial statements (e.g., balance sheet) properly and accurately. Those that oversee these financial statements, including internal and external independent auditors, must have confidence in the accuracy of the statements.

Contractors in custody of government property report information as part of their regulatory and contractual requirements to their customers. They depend on healthy and robust communication between the property management function and the contracts, finance, procurement, logistics, internal controls, and quality functions. The accuracy of records and reporting for customers depends on this teaming. Failing to work together well can have significant negative effects, including withheld payments, terminated contracts, and assessed penalties.

Property Management System Analysis

Well-trained property professionals conduct PMSAs as a contract administration functionxi and relate to multiple organizational functions, including financial management. PMSAs are performed by GPAs auditing prime contractors or by prime contractors auditing subcontractors. Similar audits, such as financial statement audits, are conducted in federal agencies by internal or external auditors, but from a financial management perspective, using a similar approach to the PMSA.

To support required reporting, assurance is needed that policies, procedures, and processes comply with applicable regulations and statutes, and that records of property are reliable and accurate. A PMSA uses a variety of audit techniques to inspect property records and policies, procedures, and processes to ensure record completeness, accuracy, and compliance with applicable regulations and contractual requirements.

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Deficiencies found during a PMSA are referred to as defects or findings, resulting in corrective action requests (CARs)—a term and process used by DCMA, also called a notice of findings and recommendations, or NFRs, by other agencies. These are accompanied by details of the defects and require a written response. DCMA defines four levels of CARs.:xii

• Level I: Issued for a nonconformity that can be corrected on the spot with no further corrective action response necessary. Level I CARs are documented and issued to the supplier management level responsible for taking corrective actions.

• Level II: Issued when a contractual nonconformity cannot be corrected on the spot. Any nonconformity associated with critical safety item characteristics and safety of flight (SOF) characteristics are issued at this level. Level II CARs are directed to the supplier management level responsible for initiating corrective actions.

• Level III: Issued to the supplier’s top management to call attention to a serious contractual nonconformity. Repeat nonconformities found within one year for the same single-point-failure SOF characteristics are issued as a Level III CAR. A Level III CAR may be coupled with contractual remedies, such as reductions of progress payments, cost disallowances, or business management systems disapprovals. A Level I or II CAR need not be issued before a Level III CAR is generated. All Level III CARs are coordinated with the contracting officer.

• Level IV: Issued to the supplier’s top management when a Level III CAR has been ineffective or the contractual nonconformity is of such a serious nature to warrant contractual remedies, such as suspension of progress payments or product acceptance activities, in accordance with applicable Federal Acquisition Regulations (FAR)/Defense Federal Acquisition Regulations Supplement (DFARS) policies and procedures. Level IV CARs are addressed to the supplier’s top-level management.

CARs or NFRs must be addressed within a time requirement set by the auditors and require a corrective action plan (CAP), including a description of the defect or finding, the plan to investigate the cause of the defect (e.g., a root cause analysis), its likelihood to be repeated, and the estimated time to implement an action plan to correct the defect and prevent a recurrence.

Equipment Management Process Maturity Assessment

An EMPM assessment differs from an audit in several ways, with various assessment approaches available. An assessment is rarely required by regulation or contractual terms, making it a voluntary action to review and assess the PMS more broadly than an audit or PMSA. It evaluates the PMS for opportunities to improve efficiency and effectiveness, regardless of PMS compliance. The EMPM model assessment approach is a VCS from ASTM Standard E2452-12 (2019), Standard Practice for Equipment Management Process Maturity (EMPM) Model.xiii This assessment approach includes data collection tools that differ from the PMSA. It serves a similar purpose in seeking to test records accuracy as well as evaluate whether property policies, procedures, and processes are followed. It discovers and reports defects. However, these defect reports have a different goal. Rather than finding and repairing defects while setting up procedures to prevent a recurrence, this deeper study evaluates the root cause of the defects,

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spanning the entire PMS and the influences of other functions, such as procurement, contracts, finance, and program management.

The maturity of a PMS evaluates the property system in the context of the entire organization. It includes organizational and PMS objectives. An EMPM assessment considers property by the value or benefits its use supplies to the organization. This perspective differs from whether the records are complete, accurate, and compliant. It seeks out weaknesses that contribute to unforeseen risks. It also evaluates processes for waste and how well results are achieved—the efficiency and effectiveness of the PMS.

This assessment approach includes objective data, like aspects of a PMSA, enhanced with substantial subjective data, including surveys and interviews across all stakeholders. Processes are observed, recording actions taken, documents involved, record creation, and updates. An EMPM assessment reports PMS maturity, by level, on a scale of 1 to 5, with associated observations of strengths, weaknesses, and risks.xiv These findings can include recommendations to enhance the performance of the PMS for improved results in all important measures. These measures can include improvements in efficiency and effectiveness, and reduced waste and risk.

PMSA Process

A PMSA, or property audit, is conducted in a standard manner, but tailored to the PMS and the circumstance requiring the audit. The government undertakes this process to review a contractor’s PMS for government property in its custody and stewardship or a contactor uses this process to review its subcontractor. A similar process may be used to audit government property under the custody of a federal agency. Auditors must be well-qualified with knowledge of applicable regulations and contract requirements, and proper training on the PMSA. The PMSA must be performed by individuals who are independent of those managing the audited property.

The most common practice follows Department of Defense (DoD) guidance as set forth in the Armed Services Procurement Regulation, Supplement No. 3, then crafted into DoD Manual 4161.2-M in 1990. DoD has its guidebook and DCMA published its own guidebook with extensive guidance for conducting a PMSA. GPAs use this guidance to audit prime contractors, though it can be used by others, including contractors conducting self-assessments as required by the FAR government property clausexv or for surveillance of their subcontractors.

“You’re Having a Property Management System Analysis (PMSA)… Now What?” by Terri Snook, CPPM, CF,

xviii

xvi in the National Property Management Association (NPMA) Property Professional, describes the PMSA process. Contract Property Management Systems Analysis, Self-Assessment and Subcontractor Surveillance, A Primer” by Dr. Douglas N. Goetz, CPPM, CF, MIAM,xvii is another resource for a deep and thorough understanding of how to conduct a PMSA. A course by NPMA—the PMSA Auditing class—uses this textbook. Rather than repeat Dr. Goetz’s guidance, this paper offers summary information. The referenced guidance, article, and textbook detail these processes in depth. Other guidance can be found in federal regulations, including the FAR and its various supplements, and the Federal Management Regulations (FMR) as well as in VCSs, such as generally accepted auditing standards and ASTM International standards, specifically in ASTM E2936-13, Standard Guide for Contractor Self Assessment for U.S. Government Property Management Systems, and the Government Accountability Office Yellow Book, referred to as Generally Accepted Government Auditing Standards, or GAGAS.

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PMSAs are scheduled in the timeframe established in the audit plan and covered during an entrance conference. Some PMSAs with small contractors take a few days, while others at large system contractors are performed over the course of a whole year with a GPA residing at that contractor’s plant or location. The basic construct of a PMSA collecting data is a sound statistical audit approach. A properly executed statistical sampling approach represents the full population of property and its records. Samples representative of the applicable government property under audit review are selected.

The core actions in this form of audit (as detailed in Dr. Goetz’s textbook) include this 10-step process, also documented in the NPMA Certification Manual:

1. State the Objectives of the Audit Test 2. Define Its Attributes/Transactions 3. Define the Population/Sampling Unit 4. Specify the Acceptance/Rejection Rate 5. Determine the Sample Size 6. Randomly Select the Sample 7. Perform the Audit Procedure 8. Analyze Defects/Deviations 9. Generalize from the Sample to the Population 10. Determine the Status of the Outcome/Process/Outcome/Process Segment.

The PMSA then applies this process to the specific lifecycle processes. FAR government property clause, 52.245-1(f), lists 10 processes or outcomes:

1. Acquisition 2. Receiving 3. Records 4. Physical Inventories 5. Subcontractor Control 6. Reports 7. Relief of Stewardship Responsibilities 8. Utilization 9. Maintenance 10. Property Closeout.

Under these outcomes are embedded sub-outcomes:

• Identification under Receiving • Consumption, Storage, and Movement under Utilization • Disposition under Contract Closeout.

Two other Property Management clausal requirements are set forth in other paragraphs of the government property clause:

• Self-Assessment • The Property Management System as a Whole.

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The GPA follows these basic process steps to examine the performance of the policies, procedures, and processes, and compliance with items, such as records, physical inventory, and maintenance. Through the use of statistical sampling and the collection of objective data, the GPA evaluates whether the records in the contractor’s PMS represent an accurate accounting of the existence and completeness of property, including all required data fields and supporting documentation. The GPA reviews whether adequate policies, procedures, and processes are in writing, in place, in accordance with applicable requirements, and being followed, looking for defects in any of the 10 areas, assessing the likelihood of recurrence of defects and their likely effect, and seeking corrective action to preclude any reoccurrence.

The PMSA ensures that the contractual requirements are met, necessary documentation is available for review, defects are well understood and documented, and findings are reported to the organization. Any findings of defects are accompanied by calls for corrections to prevent a recurrence. Depending on the severity or pattern of defects, these can result in requirements for the organization to develop CAPs.

A PMSA evaluates whether the management of the property examined and the data contained in the custody and stewardship records can be relied on as an accurate representation of the property,xix including associated property outcomes and requirements, such as adequate documentation throughout the property lifecycle, reasonable care of the property, proper identification, appropriate security and safety protections, reasonable and effective storage management, excess property review and disposition processing, and appropriate and sufficiently trained staff.

PMSA Plan

The PMSA audit process starts with a plan that includes a statement of its purpose. It establishes the bounds of what will be tested, from the full population of property or a subset of the property that exists in the PMS. It can include any of the 10 property outcomes in the government property clause or ”Elements” of the PMS.xx The plan is reviewed in an entrance conference, which is most effective when attended by the audit team and the organization’s senior leadership as well as the PMS management team. As appropriate, the plan may be adjusted before proceeding with the audit actions.

PMSA Sampling and Data Collection

Statistical and other appropriate sampling sets are determined by the auditor or audit team using proper techniques prior to initiating data collection. The sets may include one or more types of sampling, for instance, statistical sampling (the most common type due to its reliability) or judgmental or purposive sampling, which focuses on one or more types of property subsets, for example, capitalized property or high-risk property. This sampling is based on a specified confidence level, typically at a 90%, 95%, or 97% confidence rate. The referenced guidance and textbook contain the methodology and other details.

Data are then collected as described in the PMSA plan. Policies, processes, and procedures are reviewed against applicable requirements. Sampling of all necessary process areas and supporting source documentation are conducted. The testing of data fields and processes may cover a broad selection of performance requirements, ranging from receiving timeframes,

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posting of records, and record accuracy to loss metrics and prompt and timely reporting of excess property.

During the PMSA, hundreds of criteria may be tested and evaluated based on the procedures established by the contractor. Throughout the audit process, notes are captured about the sources of data, the details of the test performed, and the results of each test. Analysis of the data for all processes are performed and analyzed quantitatively to meet the objective acceptance and rejection rates set forth in the sampling tables as well as a qualitatively for the significance and materiality of any defects. Any defects are recorded with notes about their potential effects.

As it collects data, the audit team supplies status reports (oral or written) to the property manager. These status reports may include summaries of progress, details on noteworthy defects or trends of defects, any additional data requirements necessary, and any effects on the planned schedule. Once it has collected the necessary data and information, the audit team analyzes all the data and information, including details of what and how data was collected, along with details on all defects. Using this analysis, the team prepares a final report of audit findings.

PMSA Final Report

The final report contains written summaries of significant defects along with narratives or other formats describing each defect or pattern of defects. The report furnishes summaries of observations of risk areas as well as positive outcomes or other information gained. Any identified and developed CARs should be included, if enough information has been analyzed for the final report. If the development of potential CARs remains incomplete, these may follow the completion of the audit report.

The audit process ends with an exit conference led by the audit team and attended by the organization’s leadership and management staff, including management from many disciplines and functions, such as property management, finance, procurement and contracts management, logistics, shipping, and receiving. This conference summarizes the final audit report, including observations of findings and any patterns of defects or weaknesses. It highlights any significant risks as well as observations of positive aspects of the PMS.

The final report includes a summary finding of adequacy (satisfactory) or inadequacy (unsatisfactory) of the PMS. A finding of inadequacy or unsatisfactory can have significant negative effects on the PMS and the organization to which it belongs.

PMSA Follow-Up

Whatever the results of the audit, should any follow-up be necessary, such as the preparation of CAPs in response to CARs, the contractor’s property management team prepares these plans to submit to the audit team. The property management team acts on these CAPs and supplies regular status reports to the audit team.

PMSAs audit PMSs, resulting in a report of the adequate or satisfactory status of that PMS, including details of defects or findings. The report includes information on required corrective actions and plans to implement those actions to fix defects and prevent recurrence.

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EMPM Assessment Process

EMPM Plan

Like the PMSA process, the EMPM assessment process starts with a plan. The assessment plan is developed and communicated during an entrance conference meeting with the same people as a PMSA, including leadership. The EMPM’s purpose is included in the plan as are the bounds of the assessment. The purpose of an EMPM assessment is different from a PMSA, so it should be carefully described in the plan.

The same statistical and other sampling techniques are employed. Inventory accuracy supporting source documentation are tested in the same way, using the same method. Policies, procedures, and processes are reviewed similarly to evaluate compliance with applicable statutes, regulations, and as applicable, contract terms. The processes are observed to evaluate whether the policies and procedures are followed consistently.

After this point, however, the EMPM assessment approach diverts from a PMSA. An EMPM approach may require a larger assessment team than a PMSA audit team. All the data and information gathered in the part of the assessment that is similar to a PMSA is needed and valuable as is the data and information collected using additional data collection tools and techniques.

EMPM Assessment Description

The most significant word in an EMPM assessment is maturity. This approach seeks to fully understand not just the status of compliance and accuracy, but also how mature (i.e., efficient and effective) a PMS is. It uncovers gaps in processes and procedures, potential risks, and whether results meet mission requirements. Is there waste in current processes? Is there excess property stored in warehouses? Is the right property at the right place, at the right time, and in the right condition when needed? Are tracked performance metrics meaningful to leadership and those managing property? Are policies achieving expectations and consistently enforced?

An EMPM assessment seeks to answer these questions, in addition to the information that a PMSA uncovers. A PMS must comply with applicable statutes, regulations, and contract requirements. Inventory records must be reliably accurate as must derived financial reporting. Supporting source documentation must be available for reference and adequately support data contained in the Accountable Property System of Record (APSR). All property in the PMS must be justified, cared for properly, protected, and maintained safely and securely. Yet, to achieve optimal management of property, all this must be done efficiently and effectively, while pursuing continuous improvement.

By measuring the maturity of a PMS and finding strengths, weaknesses, and risks across the entire PMS throughout the lifecycle of assets, one can uncover opportunities for improvement. Compliance is required but cost savings are imperative. While improvements are not required to meet compliance with regulations or statutes, they benefit the organization and the government.

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EMPM Data Collection

A variety of techniques and tools are used to collect data and information that supplements the data that a PMSA captures. This data collection yields objective data and subjective information. Useful data can come from analyzing tracked property system metrics as well as from observations and best practice analysis.

EMPM Objective Data During an EMPM assessment, several additional areas can be analyzed, such as the number and types of hazardous items in inventory and the types of safety risks and mitigation methods for them. Many different property metrics exist, some are more meaningful than others. Each metric has a cost for collecting the data associated with it; performing a cost-benefit analysis of each tracked metric can be beneficial. Useful objective data analyzed in an EMPM assessment includes more informative data than a binary yes or no result.

EMPM Subjective Data Subjective data includes information about those performing the property management processes. Is there adequate staffing? Do they have adequate training, qualifications, and certifications, such as those from NPMA, the International Association of Information Technology Asset Managers, and the Asset Leadership Network ISO 55000. Is property management their principal role or is it secondary? Do they have adequate management support?

Well-trained property management subject matter experts collect additional subjective information using a variety of techniques, including observation of processes performed and analysis of documentation of all types. Approved exceptions to policy, process, or procedure are examined. A fresh analysis of the currency of required maintenance or calibration of items in inventory and reviews for excess property may help. An analysis of warehouse layout and optimal inventory storage locations for inventory can be informative. Present and optimal warehouse storage devices and material handling equipment can be assessed and considered.

Useful information can be gained through surveys and interviews with direct and indirect stakeholders.xxi These forms of data collection can use Six Sigma techniques or other tools to explore how, when, and why certain practices exist. Formal, published processes may fail to document subprocesses that evolved over time as those that perform these processes may not realize the discrepancy.

The best results come from interviewing a broad spectrum of individuals from across any function or department affected by or that has an effect on property management operations, including those who perform property management tasks, those who use property, those who acquire property, those who use property data (such as financial management), mission leaders who depend on property to perform their missions, and field managers or commanders who use or maintain property in the field.

Attachment A contains an example of a baseline set of interview questions. These template questions may be tailored to the organization, function, and role of each individual or group. For instance, an interview with financial management would have different specific questions than an interview with information technology or mission leaders.

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EMPM Assessment Report

All the data and information are captured, analyzed, and synthesized into a logical report structure that details and summarizes strengths, weaknesses, and risks. The data and information are an amalgam of objective data supplemented with subjective data. An EMPM assessment result is less of a two-dimensional snapshot of compliance and confirmation of completeness and accuracy, and more of a three-dimensional view of the PMS.

The assessment’s purpose is to fully understand the PMS to make continuous improvements. Those improvements enhance effective property results, lower costs, and increase the value derived from property, naturally resulting in better compliance and inventory accuracy. The conclusion of an EMPM assessment is a report with a summary of the maturity level of the PMS, with an overall measure and by subordinate segments, including acquisition—process management and operations, use—process management and operations, and disposition—process management and operations. Each of these segments has maturity level scores by certain attributes or criteria specific to each segment. The report is less of a final report and more of a guide for improvements.

Maturity levels are set by the assessment team for each of the criteria based on assessment findings for that criterion. Each is rated on a scale of 1 to 5 and, depending on the goals of the assessment, can be limited to whole numbers or rated in decimals, such as 2.5 or 3.25. The EMPM standard describes the levels.

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Figure 1 illustrates the EMPM scores, describing the five levels of maturity and what each means.

xxiii

xxii The maturity score for each of the criteria is determined by the assessment team, and the summary scores for each criteria type is averaged. The figure and tables in this article are representations of information the EMPM toolkit associated with the ASTM Standard E2452 to illustrate how the maturity scores are communicated.

Figure 1. EMPM Maturity Levels—What do they mean?xxiv

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Table 1 displays the maturity level of the individual criteria under the acquisition collection. Section 1.1 shows the average maturity of those criteria under it (1.1.1 through 1.1.10) and Section 1.2 reflects the average maturity of 1.2.1 through 1.2.8.

Table 1. EMPM Acquisition Criteria

Section Criteria Maturity Level Rating (1–5)

1.1 Process Management 2.3 1.1.1 Leadership 2.4 1.1.2 Planning 2 1.1.3 Policy, Procedures, and Internal Controls 2 1.1.4 Personnel and Staffing 2.3 1.1.5 Financial Management 2.1 1.1.6 Technology Utilization and Management 2.7 1.1.7 Records and Reporting 2.6 1.1.8 Quality Management 2 1.1.9 Risk Management 2.3

1.1.10 Assessments 2.3 1.2 Operations 3

1.2.1 Requirements Determination 2 1.2.2 Categorization 3 1.2.3 Authorization 2 1.2.4 Procurement 2.5 1.2.5 Construction in Progress Management 2.5 1.2.6 Receiving 2.3 1.2.7 Identification 3 1.2.8 Financial Recognition 3

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Table 2 displays the maturity level of the individual criteria under the use collection. Section 2.1 shows the average maturity of those criteria under it (2.1.1 through 2.1.10) and Section 2.2 reflects the average of maturity of 2.2.1 through 2.2.6.

Table 2. EMPM Use Criteria Section Criteria Maturity Level Rating (1–5)

2.1 Process Management 2.3 2.1.1 Leadership 2.4 2.1.2 Planning 2 2.1.3 Policy, Procedures, and Internal Controls 2 2.1.4 Personnel and Staffing 2.3 2.1.5 Financial Management 2.1 2.1.6 Technology Utilization and Management 2.7 2.1.7 Records and Reporting 2.6 2.1.8 Quality Management 2 2.1.9 Risk Management 2.3

2.1.10 Assessments 2.3 2.2 Operations 3.2

2.2.1 Requirements Determination 3 2.2.2 Categorization 2.3 2.2.3 Authorization 2.9 2.2.4 Procurement 3 2.2.5 Construction in Progress Management 4 2.2.6 Receiving 4

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Table 3 displays the maturity level of the individual criteria under the disposition collection. Section 3.1 shows the average maturity of those criteria under it (3.1.1 through 3.1.10) and Section 3.2 reflects the average of maturity of 3.2.1 through 3.2.4.

Table 3. EMPM Disposition Criteria

Section Criteria Maturity Level Rating (1–5)

3.1 Process Management 2.8 3.1.1 Leadership 2.3 3.1.2 Planning 2.5 3.1.3 Policy, Procedures, and Internal Controls 2.3 3.1.4 Personnel and Staffing 2.1 3.1.5 Financial Management 2 3.1.6 Technology Utilization and Management 1.8 3.1.7 Records and Reporting 2 3.1.8 Quality Management 2.6 3.1.9 Risk Management 2.3

3.1.10 Assessments 3.1 3.2 Operations 2.3

3.2.1 Requirements Determination 4 3.2.2 Categorization 4 3.2.3 Authorization 2.7 3.2.4 Procurement 2.3

Table 4 summarizes the scores from each of the sections. In this example, the overall maturity level was found to be 2.8, the average maturity level for acquisition, use, and disposition.

Table 4. EMPM Maturity Level Summary

Criteria Phase Process Management Operations EMPM Lifecycle Maturity Level

1.0 Acquisition 2.3 3.0 2.7 2.0 Use 2.3 3.2 2.8 3.0 Disposition 2.8 3.2 3.0 EMPM Maturity Level 2.5 3.1 2.8

In addition to the maturity scores, the report includes a narrative of the tools used to capture data and information as well as a summary and details of all findings from the assessment. This is best supplemented by a description of recommendations and initiatives to address weaknesses and risks as well as suggest improvements for results, cost, efficiency, and effectiveness. A project plan to implement these recommendations and suggestions can be included.

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PMSA and EMPM Comparison

A PMSA evaluates whether a PMS is acceptably compliant and reliable for accurate reporting that DoD officials can use for management purposes.xxv A PMSA does not recommend changes to improve efficiencies or effectiveness unless defects render the PMS at risk of being non-compliant or leave risks unaddressed. The PMSA requires that defects be addressed, with CAPs developed to prevent their recurrence. The goal of a PMSA is compliance and reliability of data. This is an understandable, contractually mandatory requirement.

An EMPM assessment complements a PMSA, often using its results as a baseline. It starts with a similar set of actions, yielding similar results. If an EMPM assessment is undertaken soon after the completion of a PMSA, it can use the PMSA results as input for the remainder of the assessment. It then captures more information and assesses the detail of how things are done and why they are done. Are those processes efficient and effective? Do they prevent mistakes? Do they mitigate risks? Do they improve overall results? Are missions better met because the right property is ready to go, at the right place, at the right time, as a result of a more mature PMS? These are the questions an EMPM assessment can better inform and answer.

Conclusion

A PMSA audit and an EMPM assessment are not competing approaches for examining a PMS. A PMSA is required by regulation and contract, undertaken for oversight property audits of contractor PMSs, with the results focusing on what needs to happen to ensure contract compliance and reliability of asset data and information.

The EMPM extends and deepens the understanding of the PMS for continuous improvements to the effectiveness and efficiency of the PMS and mitigates risks, resulting in improvements to the reliability of the PMS and the data and reporting that the PMSA examines.

The expected outcomes of an EMPM assessment include a better understanding of the PMS and where effectiveness and efficiency can best improve results, enhance mission readiness, achieve better data accuracy and reliability, and reduce risk. These outcomes also improve PMSA results.

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Attachment A. Baseline Template of Stakeholder Interview Questions—EMPM

Introduction We have been asked by ________________________________ to help mature the asset management capability for the entire ________________community. Some of the goals of the project include improving tracking and managing assets under the purview of the ______________________Office. As part of this work, we are conducting focus groups to better understand the strengths and challenges for the ________________________and other stakeholders. We are speaking to stakeholders from each ____________ business unit to understand the process links and rules that affect the property management function as well as your own. The comments and feedback you give us today will be synthesized in a report which we will give to the _________________________, and no comments will be attributed to any individual. Please be candid, as we are very interested in hearing all opinions.

1. What does a successful property management program mean to you or do for you? Does it matter?

2. From your perspective, what about the principal property management activities (receiving, inventory, transfer, movement, disposal) works well and not so well for your organization?

3. Do you get about the right amount and types of communication you need about property, as a whole? What might you change?

4. How well do you think the procedures are written, communicated, understood, and followed—inside the property management function and throughout the organization?

5. Have you found that the right property is in the right place, at the right time, and is ready to be used when it’s needed? Is it easy to find what you need—when you need it?

6. Do you see anything that seems like a waste of time and effort? What might that be?

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7. The asset management lifecycle includes activities and inputs from other functions, such as information technology, procurement, and Finance. Do these functions communicate effectively and do the processes that cross boundaries work as smoothly as they could?

8. Tell us about any recent initiatives or new changes under development and what may have sparked the ideas.

9. Do you believe there are adequate measures and metrics for property management operations, and who are they shared with or should they be shared with? Are they helpful or just meaningless numbers?

10. Are there adequate systems in place to capture information for management decision-making that can lead to effective and efficient property management?

11. Are there any people issues (e.g., training, competencies, or size of workforce) that affect the ability for your organization to account for property?

12. Is there anything else about property management you think we should know?

13. Do you think there is adequate leadership commitment supporting the property management system?

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END NOTES

i Guidebook for Contract Property Administration, December 2014, retrieved May 2020 from https://dodprocurementtoolbox.com/cms/sites/default/files/resources/GFP%20Guidebook%20DEC%20Fomatted%2011122014.pdf. ii DoD Contract Property Guidebook, March 2020, retrieved May 2020 from https://www.dcma.mil/Portals/31/Documents/Contract%20Property%20Guidebook/Contract_Guidebook_Mar2020.pdf?ver=2020-03-31-161117-427. iii DODI 4161.02, retrieved May 2020 from https://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodi/416102p.pdf. iv DODI 5000.64, retrieved May 2020 from https://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodi/500064p.pdf. v FMR Subchapter B, “Personal Property,” retrieved May 2020 from https://www.gsa.gov/policy-regulations/regulations/federal-management-regulation-fmr/SubChapter%20B. vi The Financial Improvement Audit Readiness (FIAR), now referred to as the Financial Audit Improvement Remediation, over the past few years has shone light on the inadequacies of existence and completeness of DoD financial records, https://comptroller.defense.gov/Portals/45/documents/fiar/FIAR_Report_June_2019.pdf. vii OMB Circular A-119, Federal Participation in the Development and Use of Voluntary Consensus Standards and in Conformity Assessment Activities, https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A119/revised_circular_a-119_as_of_1_22.pdf. viii FAR 52.245-1(b)(1). ix Acquire-to-Retire (A2R), retrieved May 2020 from https://www.dodig.mil/reports.html/Article/2029299/followup-audit-of-the-armys-implementation-of-the-acquire-to-retire-and-budget/. x Definition of Acquire-to-Retire, retrieved May 2020 from https://orwiki.org/t:A2R. xi FAR 42.302. xii DCMA Manual 2303-04, Surveillance—Document Results, Corrective Actions & Provide Feedback, retrieved May 2020 from https://www.dcma.mil/Portals/31/Documents/Policy/DCMA-MAN-2303-04.pdf?ver=2019-05-31-124220-970. xiii The EMPM VCS is available from ASTM International, retrieved May 2020 from https://www.astm.org/. xiv Figure 1, EMPM Maturity Levels—What do they mean?, LMI. xv FAR 52.245-1(b)(4). xvi “You’re Having a Property Management System Analysis (PMSA)… Now What?” Terri Snook, CPPM, CF, NPMA Property Professional, Volume 29, Issue 6. xvii Contract Property Management Systems Analysis, Self-Assessment and Subcontractor Surveillance, A Primer, Dr. Douglas N. Goetz, CPPM, CF, MIAM, © NPMA 2018, ISBN 9781945091858. xviii Generally Accepted Government Auditing Standards, Government Accountability Office Yellow Book, retrieved May 2020 from https://www.gao.gov/yellowbook/overview. xix DFARS 252.242-7005 addresses the issue of the acceptability of a business system, which includes the contractor’s PMS when there is a significant deficiency. A significant deficiency is “a shortcoming in the system that materially affects the ability of officials of the Department of Defense to rely upon information produced by the system that is needed for management purposes.” xx FAR 52.245-1(f). xxi See Attachment A. xxii The example numbers in the table are fictional, for illustration purposes only. xxiii The format for Figure 1 and Tables 1, 2, and 3 was developed by LMI to illustrate information in the Excel workbook toolkit that accompanies ASTM Standard E2452-12. xxiv This figure is an illustration of the meaning of EMPM maturity levels as interpreted by the authors, derived from ASTM Standard E2452-12 (2019). xxv DFARS 252.242-7005(b).

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about:blankabout:blankabout:blankabout:blankabout:blankabout:blankabout:blankabout:blankabout:blankabout:blankabout:blankabout:blankabout:blankabout:blankabout:blankabout:blankabout:blankabout:blank

BIOGRAPHIES

Alex N. Barenblitt, MBA, CPPM, CF, A55K 

As a government contractor for over 40 years, Mr. Barenblitt has worked with nearly every federal and defense agency and department in various roles. He began focusing on government property management in 1999. Since then, Mr. Barenblitt has implemented AMS tools and managed government property supporting Department of Defense and National Aeronautics and Space Administration programs. He joined LMI in 2017 to support property management programs and operations at federal and defense agencies. Mr. Barenblitt earned his bachelor’s in business administration at Pennsylvania State University’s Smeal Business School and his MBA at Loyola University’s Sellinger School of Business and Management. He is an NPMA CPPM, served as the president of the Harbour Lights Chapter, and is recognized as an NPMA consulting fellow and an ISO 55000 A55K–certified asset management professional. Mr. Barenblitt is also a Six Sigma Green Belt, focused on rapid problem-solving techniques and tools, is a voting member of the ASTM E53 Committee on Asset Management, and serves on the National Defense Industrial Association Government Property Systems Committee. Mr. Barenblitt is a senior consultant in LMI’s supply chain management sub-service line property management practice and supports multiple federal markets. 

Steven F. Holland, CPPM, CF, A55K 

Mr. Holland’s career in property and logistics management spans 40 years as a contractor and consultant to the federal government. He has led several federal property and asset management and logistics projects for the Department of Homeland Security, the Environmental Protection Agency, and the Intelligence Community (IC), applying experience, VCSs, and industry leading practices to improved property management programs. Mr. Holland has authored and coauthored several property-related articles, policies, procedures, plans, and manuals on personal property management and fleet management. His articles are published in the NPMA Property Professional and the NPMA Journal of Property and Asset Management. Mr. Holland’s credentials include a bachelor’s in business administration with honors and concentration in acquisition and contract management from Strayer University. He holds an NPMA Certified Professional Property Manager (CPPM) and ISO 55000 A55K certifications, specializing in federal and contract property disciplines, and is recognized as an NPMA consulting fellow. Mr. Holland is a principal in LMI’s supply chain management sub-service line, leading its property management practice, and supports the national security market. 

Susan E. Morrill, MBA, PMP, A55K 

Ms. Morrill has 39 years of broad-based experience, encompassing logistics, budget, acquisition, contingency planning, and military personnel management. She served as a logistics planner in the United States Air Force (USAF) for 22 years, retiring as a lieutenant colonel. Her military career highlights include logistics support squadron commander at Barksdale Air Force

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Base, LA; Headquarters (HQ) USAF/LGX, Pentagon, Washington, DC; joint duty at the Defense Logistics Agency, Ft. Belvoir, VA; and two tours in Seoul, Korea. Since retiring from the USAF, Ms. Morrill served as a government consultant at HQ U.S. Army and in the IC. Ms. Morrill’s credentials include a bachelor’s in business administration from the University of Texas and a master’s in procurement and acquisition management from Webster University. She holds a Project Management Professional (PMP) and an ISO 55000 certification in asset management. Ms. Morrill has been an LMI consultant in the maintenance, distribution & operations sub-service line for 12 years and supports the national security market. 

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Nailing Down the Liability Issue Once and for All—Again!

By Tom Ruckdaschel, CPPM, CF North Texas Chapter

and Dr. Douglas Goetz, CPPM, CF, MIAM Ohio Valley Chapter

One of the first articles I, Tom, read on Government property was entitled “Nailing Down the Liability Issue Once and for All” by Dr. William C. Pursch. The article was required reading in the various Air Force Institute of Technology Government property classes as well as those of the Defense Acquisition University. It was published in a 1984 publication of the old NPMA Newsletter. You can find a copy of the article at the below website.1

Indeed, much time has passed, and Dr. Pursch (R.I.P.) is no longer with us . Numerous other authors have addressed the issue of liability over the years. But the issue is just as important (and often misunderstood) as it was in 1984. The purpose of this article is to revisit the applicable regulatory requirements, the application of those requirements, and one especially important decision in case law.

Contract Types

Contract types play an important role in any discussion property liability. Contracts are grouped into two broad categories: fixed-price contracts and cost-reimbursement contracts. And among these broad groupings are a number of permutations. The Federal Acquisition Regulation (FAR), Part 16, provides ample policy guidance on their application and use. It’s a good idea to familiarize ourselves with FAR part 16 every once in a while.

One important point to remember—some Government contracts are of the negotiated variety; some are not. Knowledge and awareness of this distinction is necessary for the proper application of the Government’s risk of loss policy cited at FAR part 45.104 and the contractually binding language of FAR 52.245-1.

Loss of Government Property—The Government’s Policy

In most cases (yes, there are exceptions), the Government does not hold contractors responsible and liable for property loss. This “self-insurance rule” dates to the 19th century and has been stated and applied in decisions of the U.S. Comptroller General, for example:

• “…the Government is essentially a self-insurer in certain important areas, primarily, (the) loss or damage to Government and the liability of government employees insofar as the government is legally responsible or would ultimately bear the loss. In the absence of express statutory authority to the contrary to the contrary, appropriated funds are not

1 https://government-property.com/articles/

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available for the purchase of insurance to cover loss or damage to government property…” GAO/OGC 91-5

• “The basic principle of fire, tornado, or other similar insurance is the lessening of the

burden of individual losses by wider distribution thereof, ad it is difficult to conceive of a person, corporation, or legal entity better prepared to carry insurance or sustain a loss than the United States Government (19 Comp. Gem 798,000 (1940)

• The magnitude of the (government’s resources obviously makes it more advantageous for

the Government to carry its own risks than to shift them to private insurers at rates sufficient to cover all costs, to pay their operating expenses, including agency of broker’s commissions, and to leave such insurers a profit (19 Comp. Gen 211, 214 (1939)

The rationale is clear. If t