I n t e g r i t y - S e r v i c e - E x c e l l e n c e Headquarters U.S. Air Force Government Furnished Equipment Accountability Mr. Colquitt Quitty Lawrence

I n t e g r i t y - S e r v i c e - E x c e l l e n c e

Headquarters U.S. Air Force

Government Furnished Equipment Accountability

Mr. Colquitt “Quitty” LawrenceAF/A4LM

2 February 2011


Overview

AFAA Audit Report

Rapid Improvement Event

Game Plan

Data Call/Challenges

Contracts vs Contract Property Management System (CPMS)

Summary

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AFAA Audit Report

AFAA report highlighted the AF did not properly account for and report GFE in AFEMS

AF imposed financial reporting of GFE onto contractors and transferred fiduciary responsibility away from the AF

Air Force lost accountability of GFE in excess of $22 billion (acquisition value), was unable to determine how much was financially reportable, and is at great risk for fraudulent activity

GFE recognized as Material Weakness at June ESC meeting

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Rapid Improvement Event

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Bottom Line

IF:

1. Policy is clear and aligned

2. Roles and responsibilities are clear and understood

3. Procedures are clear and documented so that people know how to execute their roles and responsibilities

4. Policy and procedures are strictly followed

5. Oversight ensures compliance

THEN:

100% of GFE will be recorded in AFEMS

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RIE Objectives

1. Respond to ESC: Plan to ensure GFE situation does not happen again

2. OUTPUT : Clarify Current Condition:

o Problem/Scopeo Definitionso Organizational roles and responsibilitieso Process and IT

Root Cause:o What caused the problem to begin with?

Action Plan(s):o What needs to be done – and how it addresses the problemo Who will do it (OPR/OCR)o When it will be done

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Participating Team Members

Almost 40Participants


RIE Approach and Outcome

Inputs:

Team Member Briefings

Audit Findings ESC Guidance OSD GFE Process

Flow

Processes:

Clarified the Problem Scoped the Effort Established Desired

Future State Reviewed Current

State Identified Key

Problem Areas Performed Root

Cause Analysis Created Action Items Planned Way Ahead

Outputs:

Key Findings Recommendations Way Ahead Plan

(Documented in A3)

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Scope

Government-Furnishing Equipment (GFE) only: Equipment going to/from contractors Equipment coming out of Contractor Acquired Property

(CAP) that is titled to and accepted by the government

Scope does NOT include: Government-Furnished Material (GFM) Contractor Acquired Property (CAP)

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Applied A3 Model(Work-In-Progress)

8-Step Problem Solving Process

Step 1: Problem Statement

Step 2: Break Down the Problem/Identify Performance Gaps

Step 3: Set Improvement Targets

Step 4: Determine Root Cause

Step 5: Develop Countermeasures

Step 6: See Countermeasures Through

Step 7: Confirm Results and Process

Step 8: Standardize Successful Processes

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Step 1: Clarify &Validate the Problem

Problem Statement:

“The Air Force is not properly accounting for GFE in the Air Force Equipment Management System (AFEMS)”

Additional References:

o AFAA report published 11 Jan 2010 noted that “the Air Force lost fiscal accountability of GFE in excess of $22 billion” and “did not take effective actions to improve GFE financial reporting.”

o Executive Steering Committee (ESC) provided guidance to address issue at June 2010 meeting

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Step 2: Breakdown the Problem and Identify Performance Gaps

Examples:

Policy does not provide clear directions of expectations

Multiple organizations and players are involved in ensuring GFE properly accounted for in AFEMS – who is responsible for what is not clear

There is no consistent set of procedures for responsible parties to follow, and there are multiple data systems are involved in GFE tracking using different data elements

No established consistent means for ensuring actions are being taken and there is a lack of understanding among the players

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Step 3: Set Improvement Targets

Desired Future State:

“All GFE recorded in AFEMS”

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Step 4: Determine Root Cause

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All GFE is not properly accounted for in AFEMS

Policy (1)

Roles &Responsibilities (2)

Compliance (4)Awareness (5)

Procedures (3)Information & Data (3)

Gaps

Inconsistent

Unclear

Lots of Handoffs

Many Players Unclear Responsibilities

Lack of Internal Controls

Training

Cumbersome Procedures

Of Policy

Of Impact

Of Roles

Cumbersome

Unclear

Non Standard

Undocumented

Non Standard

IT Overlays

Drops at Handoffs

5-Whys / Root Cause Analysis: Summarized Fishbone Diagram



Needs to be an AQ/A4/7 joint solution

Need to ensure policy is in alignment (DoD AF MAJCOM)

Need to ensure roles and responsibilities are clearly defined

Need to ensure procedures are consistent across organizations

Need to ensure appropriate representation for Business Case Analysis (BCA) Identify team members (Acquisition, Contracting, Logistics,

Legal, ...) Create checklist for required actions Establish action plan for providing GFE

Establish Accountability Property Office (APO)

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DEC10 ESC review and vector check – Seek directional approval

DEC10 Wrap-up bulk of ‘Discovery’ related Action Items

JAN11 Release Joint memo (AQ & A4L) tasking to identify GFE on Command and base contracts.

FEB11 Schedule follow-up session with GFE working group to drive through new discovery and develop greater detail to corrective action plan

APR11 Publish Guidance Memorandum(s)

Countermeasures:

Established bi-weekly GFE meeting to manage and drive progress

Periodically update senior leadership through A&FM IPT and Executive Steering Committee

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Step 6: Seek Countermeasures Through

GFE Accountability Effort:

Senior Officials: Mr Durante (SAF/AQX) / Mr. Allen (AF/A4L)

Co-Leads: Maj Hicks / Mr. Lawrence

Working Group: Participating Team Members

Advisors: OSD AT&L, DCMA, AFAA/FSF

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Game Plan

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Game Plan

Address the $22B (SAF/FMPR/A4LM/754 ELSG) – ECD: Mar 11 OPR: A4LM Review contracts that accounted for 95% of GFE balance Validate GFE on contracts Populate AFEMS for missing GFE Provide update to A&FM IPT – 17 Feb 11

Obtain and populate AFEMS with GFE information - ECD: Dec 11 (SAF/AQXA/A4LM/A4LE//754 ELSG All contracts with GFE Validate information

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Game Plan (cont’d)

Establish future processes to account for GFE – ECD: Sep 11

(SAF/AQXA/AQCI/A4LM/A4LE) Develop Policy and Procedures – Nov 10 – Jun 11 Final coordination – Jul 11 Publish Policy and Procedures – Aug 11

Revise responses to AFAA audit – A4LM/A4LE Coordinate with AFAA ECD: Feb 11

Establish Air Force Property Office – Initiate Study – Mar 11 Single POC for Government Furnished Property Established in Navy (Central Property Office)

Provide updates to A&FM IPT monthly and ESC quarterly

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Data Call

Data Call sent 5 January to Program Offices Requested GFE on all contracts Suspense of 10 Jan; still receiving additional/revised

responses Reviewed over 120 contracts and over 53K records Working through submissions

Review Process Validating each GFE line on contract Comparing CPMS data Verifying GFE is in Air Force Equipment Management System

(AFEMS)

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Challenges

Program Offices and contractors understanding of tasker Contractors’ data consolidated under GFP

Equipment Aircraft Spare parts

Tagging/listing spare parts as equipment

Data issues Reliance on contractors to provide data Incomplete data (e.g. DODAAC, SN/PN, Serial Number) Data structure (e.g. contract numbers) must modified for

matching purposes

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Contracts vs CPMS to Address $22B (cont’d)

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WeaponSystem

CPMS(AFAA source)

GFE Data Call – All Equipment

GFE Data Call – Capital Equipment

Recorded in AFEMS

C-17 $ 2,947.8M $ *3,448.3M

$ 182.0M $ TBD

B-2 2,835.7M *1,328.7M 509.7M 29.0M

LGM-30 1,346.2M 120.6M 80.6M

F-15 1,098.9M 413.7M 349.3M

C-135 987.6M 2.6M .6M

KC-135 933.1M 8.0M .8M

E-3 597.5M .7M .3M

B-1 587.6M 124.6M 91.1M

C-130J 562.0M .8M .1M

F-16 486.0M .0M .0M* Response includes aircraft, heavily skewing numbers


Summary

Aggressively working the $22B disconnect

Game Plan in place with POCs and milestones

Validating data time consuming

Keep leadership informed through A&FM IPT and ESC

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Documents

I n t e g r i t y - S e r v i c e - E x c e l l e n c e Headquarters U.S. Air Force Government Furnished Equipment Accountability Mr. Colquitt Quitty Lawrence