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Overview of DFARS Case 2009-D008

Overview of DFARS Case 2009-D008. Presented By: Tom Ruckdaschel July 2011.

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Overview of DFARS Case 2009-D008

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  1. Overview of DFARS Case 2009-D008 Presented By: Tom Ruckdaschel July 2011

  2. The information contained in this presentation represents only the personal views of the presenter and not necessarily those of the United States Government, DoD or DCMA. The information presented should not be construed as changing or modifying any statute, regulation, DoD or DCMA policy or guidance, or any term(s) of any contract with the United States Government or any department or agency of the United States Government. The information presented also does not affect in any way, any on-going or future property management system analysis.

  3. Where DCMA Fits Under DoD Secretary of Defense Chairman Joint Chief of Staff Under Secretary of Defense (Acquisition, Technology & Logistics) Army Navy Air Force Marine Corps Assistant Secretary of Defense (Acquisition) (Combat Support Agency)

  4. Organizational Structure Strategic Effects Office of the Director General Counsel Chief of Staff Corporate Support EEO Office of Independent Assessment Reserve Affairs Strategic Portfolio Management & Integration Directorate Human Capital Directorate Finance Business Operations Directorate Aircraft Operations Directorate Contracts Directorate Engineering & Analysis Directorate Quality Directorate Information Technology Directorate International Directorate Operations Directorate Special Programs Directorate Operational Streamlined CMO Streamlined CMO Streamlined CMO Primary CMO Primary CMO Primary CMO Eastern Region Central Region Western Region Tactical

  5. Our CONUS Presence • Special Programs • Special Programs East • Special Programs South • Special Programs West • Eastern CMOs • Headquarters - Boston • Atlanta • Baltimore • Boston • Garden City • Hartford • Manassas • Lockheed Martin Marietta • Lockheed Martin Moorestown • Orlando • Philadelphia • Boeing Philadelphia • Sikorsky Aircraft • Springfield • Raytheon Tewksbury • APO • NSEO • Western CMOs • Headquarters – Carson • Denver • Boeing Huntington Beach • Lathrop • Lockheed Martin Denver • Boeing Long Beach • Los Angeles • Palmdale • Phoenix • Santa Ana • Lockheed Martin Sunnyvale • Raytheon Tucson • NPO • Central CMOs • Headquarters - Chicago • Chicago • Dallas • Dayton • Detroit • Lockheed Martin Forth Worth • Bell Helicopter Forth Worth • Huntsville • Boeing St. Louis • Twin Cities • AMP • AIMO

  6. Our International Presence

  7. DCMA Core Functions FAR 42.302(a)(b) Contract Management Cost and Pricing Property and Plant Clearance Quality Assurance Engineering and Analysis Support Delivery Schedule Management Earned Value Management Contract Safety Transportation

  8. Property and Plant Clearance • Four Business Areas: • Property Center (CONUS) • DCMA International (OCONUS) • Contingency Contracting (Iraq/Afghan) • Special Programs • Ensure contractors meet FAR/DFARS • requirements • Provide effective and efficient oversight • & surveillance (property audits) • Perform reutilization screening (of excess • property, as required) [Plant Clearance • Center] • Evaluate contractor reported property loss, • damage destruction, theft

  9. Important Terminology • Federal Acquisition Regulation (FAR) • Defense Federal Acquisition Regulations Supplement (DFARS) • Procedures, Guidance and Information (PGI) • Contractor Inventory (FAR Part 45.101) • Plant Clearance Officer (FAR Part 45.101) • PCARSS: Plant Clearance Automated Reutilization Screening System

  10. Current Issues • Problem statement: “General uncertainty in property disposition/plant clearance; wide swings in policy interpretation; many “myths and legends” • DoD DFARS Parts 245.5, 245.6/7—in need of substantial update and reform • Obsolete policy and terminology (somewhere between 35 and 40 years old) • Not contractually binding on contractors (no clauses) • FAR also requires clarification…so: • Two proposed rules in play: • FAR Case 2009-009 • DFARS Case 2009-D008

  11. DFARS Parts 245.6/7 (cont.) • Proposed rule published Dec. 3, 2010 • Major change: establishes a DFARS clause for property disposition/plant clearance • DoD does not have its own clause for property disposition • Why is this important? • Unlike other life-cycle events, property disposition authority is mostly statutory • PCARRS not contractually binding

  12. Quick Overview PCARSS Plant Clearance Automated Reutilization and Screening System The “automated Inventory Schedule” [SF 1428] Deployment began in 1995 Used by most DoD contractors

  13. DFARS Parts 245.6/7 (cont.) • “The contractor shall complete SF 1428, Inventory Schedule B, within the PCARSS.” Included in the new DFARS clause clause Makes clear that contractor use of PCARSS is contractually required

  14. Highlights (cont.) New DFARS 245.107: “Use the clause at 252.245-70XX in solicitations and contracts that contain 52.245-1.” Bottom line: the new DFARS clause is mandatory for DoD contracts containing the FAR clause What about legacy contracts? I knew you would ask…

  15. What’s Changed • Deletes: • Obsolete special processing requirements • Industrial Plant Equipment (not since 1994) • Contractor Inventory Redistribution System • Automated Data Processing Equipment • Obsolete supply condition codes • Inventory Schedule “D” • Modified Plant Clearance language • Clarifies: • Scrap requirements • Demilitarization requirements • Trade Security Control issues

  16. Overview: New PGI • PGI 245.602-70— • Contains procedures in assigning a plant clearance case; establishing a case file • Clarifies use of DLA Disposition Services (“DRMO”) • Provides new direction for Plant Clearance Officers on Trade Security Controls (TSC): • Ensure prospective buyers are not an ineligible transferee (those on the excluded party list) • Cross reference contractor inventory to an NSN and DEMIL code • Consult with DEMIL Program Office/Trade Security Control Program office (can property be sold to the public? Is a TSC assessment required?) • Provide end use certificate as required

  17. Overview: Scrap Disposal • Revised/update definition of scrap • Scrap procedures • No requirement for Govt “approval” • Consistent with FAR Case 2010-009 • Procedure should provide for the “effective and efficient disposition of scrap” • Minimize costs • Maximize proceeds • Contain appropriate internal controls (mitigate improper release) • Commingling of Government owned/contractor owned scrap is “allowed’ with PLCO approval

  18. Highlights (cont.) • 245.603-3, Screening • Must be DoD-wide; must take place before sale • Requiring agency has priority • 245.604-3, Sale • Informal/formal bids • 252.245-70XX, new definitions • Commerce Control List Items • Munitions List Items • Scrap

  19. Revised/New Scrap Policy (cont.) • New definition of scrap • Derived from DoD Instruction 2030.8 (Trade Security Controls) “Scrap means property that has no value except for its basic material content. For purposes of demilitarization, scrap is defined as recyclable waste and discarded materials derived from items that have been rendered useless beyond repair, rehabilitation, or restoration such that the item's original identity, utility, form, fit and function have been destroyed. Items can be classified as scrap if processed by cutting, tearing, crushing, mangling, shredding, or melting. Intact or recognizable Munitions List or Commerce Control List Items, components, and parts are not `scrap.''

  20. Fed. Register Notice-Dec 2010 Lists all changes

  21. “The Contractor shall demilitarize contractor inventory possessing offensive or defense characteristics, and not required within DoD, in accordance with the terms and conditions of the contract and, consistent with Defense Demilitarization Manual, DoD 4160.21-M-1, edition in effect as of the date of this contract.” This language makes clear that demilitarization requirements should be spelled out –up front

  22. Summary • Be aware that: • The rule includes a new clause -- 252.245-70XX • The clause will require DoD contractors to: • use PCARSS • develop a scrap procedure (if applicable) • ensure proper review of sales buyers • Also…that the Government has to include demilitarization requirements within contract terms and conditions • Other discussion items • Export controls • Trade Security Control clearances • Property disposal overseas

  23. Useful Information • Review DFARS and FAR proposed and interim rules • Change Notices:http://www.acq.osd.mil/dpap/dars/change_notices.html • Submission input of public comments: http://www.acq.osd.mil/dpap/dars/out_for_public_comment.html • View public comments on proposed & interim rules • DFARS rules: http://www.acq.osd.mil/dpap/dars/out_for_public_comment.html • FAR rules: www.regulations.gov • View status of open cases • DFARS rules: http://www.acq.osd.mil/dpap/dars/case_status.html • FAR rules: http://www.acq.osd.mil/dpap/dars/far_case_status.html

  24. Any Questions? email tom.ruckdaschel@dcma.mil Telephone (804) 734-0505

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