If you are working with the Department of Defense and thus involved with the Defense Contract Management Agency (DCMA), you have to be careful of making any form of inventory tracking error. Government inventory management contracts, especially those for the Department of Defense, require a level of professionalism that most other private contracts don't. For that reason, we recommend that you implement a strong inventory tracking software at your business.
Even a typical inventory tracking software can decrease errors by as much as 70%. This type of software would be invaluable for when the DCMA inevitably sends an auditor to check on your business. A good audit management software will also make a large difference in this situation.
A DCMA auditor will focus on several areas, depending on the type of contract and business that you are involved in. It's important that you're prepared for them when they arrive, and have some idea of what they expect. Some common areas of focus are:
Auditors will look to make sure that all employees involved with IUID asset identification and reporting understand their organization's processes. They will also look for an execution play that shows the company-wide strategy for adhering to the requirements and provisions of the contract. These include standard operating procedures, best practices, and a strong inventory management software that contains detailed information on the stored inventory.
An auditor will also look to ensure that all physical labeling, tagging, and marking is done in accordance with proper military standards. Your inventory should be categorized in a logical and precise manner, with audit management software showing what items entered or left the facility, and their labels. They will also look at the durability and materials used in this labeling, and that the tags are in the correct location.
Proof of Registration
DCMA auditors seek to verify that all assets and shipments are registered in the system accurately, and will be checking your audit management software to be sure of this. They will look into the IUID's number, make sure that it's registered under the correct domain (acquisitions, custody, legacy, etc.), and that this information is found and registered in the Invoicing, Receipt, Acceptance, and Property Transfer (iRAPT) system. You should make sure that you are familiar with, and follow, all iRAPT system requirements.
These are just some of the expectations that a government inventory auditor from the DCMA will have for you. You should make sure you look into their website and their expectations, to make sure you are prepared for an audit at a moment's notice. You should also obtain a good audit management software, and keep your records detailed and precise.