Improving Property Management

1. Improving Property Management By Veeral Majmudar ICPM Quarterly Meeting October 25th, 2007 A Case Study in Property Management Program Improvement

2. Introduction • 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

3. 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

4. Why improve property management practices? Increased management and oversight of property assets could save hundreds of millions of dollars. - General Accounting Office, 2004

5. Other questions we all should be 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?

6. …and as if that wasn’t enough…

7. There are numerous drivers for improvement 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

8. Agency response is key to property program 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

9. Case Study: Agency Property Management

10. Agency personal property program: Decentralized • 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)

11. Drivers: 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

12. Response: Develop four focus areas of improvement I. Policy and Regulations Establish 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 Control Certify 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

13. Focus Area #1: Policy & Procedures

14. Focus Area #2: Learning & Growth

15. Property Pamphlet

16. Focus Area #3: Information Systems

17. Property Management System

18. Focus Area #4: Inventory Control

19. Inventory Process Map

20. 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

21. Opportunities exist to parlay the 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

22. 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

23. Common mistakes on property specific 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

24. Importance of an good SOW To establish performance standards and a contractual baseline To provide the contractor with a basis of estimate To communicate effectively

25. 1. Establish performance measures for contractors to use

26. 2. Provide contractor with a basis of estimate • 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

27. 3. 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.

28. The End Contact Info: Veeral Majmudar Savan Group vmajmudar@savangroup.com (571) 527.0901 Questions?