Improving Property ManagementImproving Property Management

A Case Study in Property Management Program Improvement

By Veeral Majmudar

ICPM Quarterly MeetingOctober 25th, 2007

IntroductionIntroduction

• Veeral Majmudar– President, The Savan Group (www.savangroup.com)

• Management Consulting Firm (Arlington, VA)• Federal & Private Sector Clients• 8A Certification Pending• Primary Focus Areas: Asset Management

• Guest Speaker at Agency property conferences• NPMA Member

Why am I speaking today?Why am I speaking today?

Through my experience… • I learned property management is a critical

but undervalued area • I realized there are better ways to manage

assets.• I wanted to help people maximize their

resources• I wanted to share my experience with others

Why improve property management Why improve property management practices?practices?

Increased management and oversight of property assets could save hundreds of millions of dollars.

- General Accounting Office, 2004

Other questions we all should be Other questions we all should be asking ourselves…asking ourselves…

• Do you have asset visibility across systems and processes?

• Do you have objective identification of compliance and performance indicators?

• Do you have information forensics for auditing the supply chain?

• Do you have a risk mitigation plan?

……and as if that wasn’t enough…and as if that wasn’t enough…

There are numerous drivers for There are numerous drivers for improvementimprovement

• Federal Regulations dictate many of the improvements in asset management

• Proper use of taxpayer dollars• President’s Management Agenda Executive

Scorecards • GAO Audits of the Property Management

Program has occurred at eight agencies in the last 10 years

• Potential for Bad Press Coverage

Agency response is key to property Agency response is key to property program successprogram success

• Ensuring financial & physical accountability through effective operational oversight

• Ensuring cost-efficient use of personal and real property through effective information sharing and training

• Removing procurement duplication to avoid unnecessary spending of tax dollars

• Mitigating audit risks from internal (IG) and external parties (GAO) through site reviews & audits

CASE STUDY: AGENCY PROPERTY MANAGEMENT

Agency personal property program: Agency personal property program: DecentralizedDecentralized

• One Agency Property Management Officer • Many Accountable Areas (AA), each consisting

of the following:– Property Management Officer (PMO)– Property Accountable Officer (PAO)– Property Utilization Officer (PUO)– Multiple Custodial Officers (CO)– Board of Survey

• 25,000 pieces of property (~$400 MM)

Drivers:Drivers: Several Outstanding Issues Several Outstanding Issues

• Lack of oversight, guidance, and accountability• Out-dated policy and procedures• Unaccounted for personal property• Insufficient training programs and materials• Inconsistent inventory reporting• Lack of uniform system applications• Lack of internal review/audit programs

Response:Response: Develop four focus areas of Develop four focus areas of improvementimprovement

I. Policy and RegulationsEstablish a clear and direct policy on agency-

specific personal property management in accordance with the federal regulations

II. Learning and Growth Establish training programs to ensure all

property officers are equipped to successfully implement their responsibilities

III. Information Systems Ensure information systems support property

management needs and meet federal requirements for tracking of personal property

IV. Inventory ControlCertify agency property accountability.

Maintain an internal audit program that uses systemic control techniques necessary to

ensure a clean audit opinion and asset accountability as required by law

Focus Area #1: Policy & ProceduresFocus Area #1: Policy & Procedures

PROGRAM AREA INITIATIVEELEMENT

TYPETIMEFRAME

Policy and Regulations

Develop Personnel Roster for all Accountable Areas New Completed

(June 2004)

Develop Online Property Guide (incorporated into website) New Completed

(Jan 2005)

Ensure Property Officers & Board of Surveys Established for All Accountable Areas

Revised* Completed

(Feb 2005)

Develop Personal Property Management Policy Manual Revised * Completed

(July 2005)

Implement Key Processes (excess, disposal, transfer) New Completed

(July 2005)

Revise performance measures (for capitalized property) in accordance with aligning Accountable Areas with Agency facilities

Revised* Completed (June 2005)

Realign Accountable Areas with Agency Facilities New Ongoing

Promote the development of the ‘Computers for Learning’ Program Revised* Ongoing

Promote Federal Electronics Challenge (FEC) Program thru various communication channels such as emails and conference calls

New Ongoing

Implement procedures for the Recycling Electronics and Asset Disposition (READ) Services requirements

New Completed

(Sept. 2006)

Focus Area #2: Learning & GrowthFocus Area #2: Learning & Growth

PROGRAM AREA

INITIATIVE ELEMENT TYPE TIMEFRAME

Learning & Growth

Develop & conduct Property Officers customer survey New Completed

(March 2004)

Establish Property Management Working Group New Completed

(November 2004)

Develop Agency property management website New Completed

(May 2005)

Develop and distribute Property Management Pamphlet New Completed

(May 2005)

Develop and organize National Property Management Workshop New Completed

(July 2005)

Conduct communications and outreach efforts New Ongoing

Develop Online Property Officers’ Training module New FY06

Conduct Online Property Officers’ Training session New Ongoing

Property PamphletProperty Pamphlet

Focus Area #3: Information SystemsFocus Area #3: Information Systems

PROGRAM AREA

INITIATIVE ELEMENT TYPE TIMEFRAME

Information Systems

Define system requirements and recommendations for Agency-wide Property Management Database (PMD)

New Completed

(November 2005)

Finalize IFMS conversion requirements New Completed

(April 2005)

Implement PMD Agency-wide (CSC Software – RTP System) New Completed

(July 2005)

Discuss viability of online purchase card tracking system New FY06

Develop procedures for the implementation of the Federal Electronics Challenge for sensitive items

New Completed

(September 2005)

Property Management SystemProperty Management System

Focus Area #4: Inventory ControlFocus Area #4: Inventory Control

PROGRAM AREA

INITIATIVE ELEMENT TYPE TIMEFRAME

Inventory Control

Create inventory tracking matrix New Completed

(April 2004)

Standardize inventory process mapping New Completed

(November 2004)

Develop site review program New Completed

(March 2005)

Conduct inventory review/audits (Site Visits) New Ongoing

Develop property management program performance measures New Completed

(March 2006)

Provide technical support to the Accountable Areas Existing Ongoing

Inventory Process MapInventory Process Map

What was the end result?What was the end result?

• Twenty-nine new or revised initiatives• Reduced management cost by 25%• Streamlined operational process• Increased proper disposal of excess inventory

by 20%• Improved communication and training

programs• Received public recognition from senior level

Agency directors and officials

Opportunities exist to parlay the Opportunities exist to parlay the success to other agencies…success to other agencies…

• Improve your current business processes

• Mitigate potential risk of audits• Improve lifecycle management of

assets• Enhance training of employees and

contractors• Properly utilize available technology

to better management property

Before you do anything, however…Before you do anything, however…

• You must develop a clear, concise, and measurable statement work

• The problem: – Agencies cannot articulate many of the critical

details of a solution until they have reviewed the contractor’s proposals

Common mistakes on property Common mistakes on property specific SOWsspecific SOWs

• Lack of specifics– Inconsistency of requirements– Vagueness

• Lack of accuracy– Calling a requirement by different names– Conflicting or unreasonable time schedules– Incomplete description of requirement

• Lack of performance measures– Inventory accuracy improvement rates– Loss rates

Importance of an good SOWImportance of an good SOW

• To establish performance standards and a contractual baseline

• To provide the contractor with a basis of estimate

• To communicate effectively

1. Establish performance measures 1. Establish performance measures for contractors to usefor contractors to use

Performance Measures

Formula

Property Record Accuracy Rate

(Number of Accurate Property Records at Time of Physical Inventory /Total Number of Property Records) X 100%

Reutilization Rate (Acquisition Value of Reutilized Property /Acquisition Value of Unrequired Property Reported to GSA) X 100%

Excess Property Disposed on Time

(Total Number of Excess Property Items Disposed of Within 180 Days in the Last Year /Total Number of Excess Property Items Disposed of in the Year) X 100%

Loss Rates Number of Accountable Items Surveyed / Total Number of Accountable Items and Dollar Value of Accountable Property Surveyed x 100% Total Value of Accountable Property

2. Provide contractor with a basis of 2. Provide contractor with a basis of estimateestimate

• Contractors develop cost estimates based on work description in the SOW

• Provide detailed descriptions of tasks requirements and specific deliverables

• Request a WBS (work breakdown schedule) – Outlines resource allocation for requirement– Outlines level of effort in dollars and hours

3. Communicate effectively3. Communicate effectively

• SOW is ultimately a vehicle for communication• It must be understood by all personnel

involved in the solicitation process– Contractors, legal & technical personnel,

accountants, etc.

• Request a oral presentation on project plan once proposals have been received from potential contractors to ensure consistency with SOW.

The EndThe End

Questions?

Contact Info:Veeral Majmudar

Savan Groupvmajmudar@savangroup.com

(571) 527.0901