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DOE Cites ASTM Standards in Balanced Score Card System

For the first time, ASTM property management standards have been incorporated by a federal agency into the performance standards of both federal and contractor organizations managing federal personal property. The Department of Energy has adopted two ASTM standards associated with inventory practices and lost, damaged, and destroyed property into its Balanced Scorecard System of performance measurement. The standards, developed by ASTM Committee E53 on Property Management Systems, are:

E 2131, Standard Practice for Assessing Loss, Damage, or Destruction (LDD) of Property—This defines the assessment of LDD of property, assets, or material. LDD occurs when such property is found to be missing, damaged, or destroyed; and
E 2132, Standard Practice for Physical Inventory of Durable Moveable Property—This defines the physical inventory of durable, moveable property. Physical inventory is a vital part of a property control system.

“We have an incredible range of things in our property inventory, all of which we have to manage, to make sure it is available when we need it,” confirmed Stephen J. Michelsen, director, Office of Resource Management, DOE. Scientific equipment managed by property managers working for the DOE ranges from simple hardware to immense accelerator-testing systems.

“The Balanced Score Card system is a model created by Kaplan and Norton at Harvard University,” he explained. “We’ve been using this framework for managing performance for a number of years. The Balanced Score Card is an industry accepted best practice model for both assessing and managing processes and outcomes. In DOE we use this system to set metrics to measure performance against goals. For instance, we may want our contractors to reduce the costs of their property management function by ‘x’ percent. So we measure progress over time looking for positive trending toward that goal.”

These percentages are some of the things defined in the ASTM standards, Michelsen said.

“For instance, in the case of lost, damaged, and destroyed property, there’s a point at which it’s no longer economically reasonable to attempt to mitigate the loss risk associated with the value of the last increment of property,” he continued. “And the E53 standards set that loss-risk threshold at two percent, meaning that if you can control and locate 98 percent of your property then it is the consensus of the property management community that the control and recovery of the last two percent of the inventory greatly exceeds the value of the missing items.

“The Federal Acquisition Regulation, subpart 11.101c, basically says that the government should be going out and looking for consensus commercial standards and applying those to its operations where those standards are not in conflict with the law,” noted Michelsen. “And in fact, these standards that have been developed meet that test. So the Department of Energy is actually going to say we expect our federal employees and our contractors to perform at least in accordance with the ASTM standards. They’re both going to be in our performance measurement system.”

Michael Hay, manager of State Property Accounting for the Texas Comptroller of Public Accounts in Austin, also plans to use the new standards for measuring and unifying statewide property management operations. “Texas is already beginning to consider how to use the new ASTM standard for lost, damaged and destroyed property,” he said. “This standard will serve as the basis for establishing statewide norms and comparing individual agency operations against those norms.” Hay also stated that he hopes the new standards are only the first of many to be issued in the field of property management.

“With NPMA’s direct involvement, ASTM is the first organization to develop and promulgate voluntary property management consensus standards against which successful operations could be measured in the profession of property management,” said Richard Olsen, NPMA president. “These standards were and are being developed based on a contemporary vision of the true or contributory value of moveable and durable assets to the holding organization rather then simply using acquisition value to dictate property control as a demonstration of managerial responsibility.

“We feel that through the development of numerous standards,” concluded Olsen, “both NPMA and ASTM can promote and facilitate the use of such indices of accepted industry performance as well as the objectives and outcomes that leading organizations will apply to enhance global competitiveness.”

Committee E53 meets June 27-29 in Houston, Texas. For further details, contact Staff Manager Pat Picariello, ASTM (phone: 610/832-9720). //

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