UNCLASSIFIED (U)

14 FAH-1 H-200 
REQUIREMENTS PLANNING AND USE

14 FAH-1 H-210

personal PROPERTY UTILIZATION

(CT:PPM-14;   06-28-2012)
(Office of Origin:  A/LM)

14 FAH-1 H-211  Personal PROPERTY ANALYSIS AND MANAGEMENT

(CT:PPM-14;   06-28-2012)
(Uniform State/USAID)

In the lifecycle management of U.S. Government personal property, many types of personal property which are not critical to operations are replaced only when they actually break down.  Other types of property are managed using a planned replacement cycle to ensure continual operations and submission of necessary budget estimates.  Reference OMB Circular A-11, Part 7, Planning, Budgeting, and Acquisition of Capital Assets.  The responsible property official will need to include requirements for the replacement of personal property.  The condition of the personal property is a basis for forecasting and justifying those requirements.  Most personal property has a definite life span.  An item may become worn beyond repair or become otherwise unusable or, after a period of time, maintenance and repair costs may exceed the cost of replacing the item.

14 FAH-1 H-212  PROGRAM OBJECTIVES

(CT:PPM-14;   06-28-2012)
(Uniform State/USAID)

a. The objectives of a personal property replacement program are to provide for the orderly replacement of personal property by prescribing minimum replacement standards, and projecting equipment requirements in terms of items with costs for planning purposes.  The term “minimum replacement standards” means criteria that can be expressed in various methods such as maximum allowable one-time repair limits as percentage of acquisition cost, mileage, or some period of time.  Factors used in the process are life cycle; degree of use; historical maintenance cost; exchange/sale value at various stages of lifecycle; established ratio of one-time repair cost, including any shipment cost, to replacement cost; and other factors, such as the availability of local repair capability, that can be used as a reasonable basis for determining whether personal property should be replaced and that results in the best return to the U.S. Government.

b. The acquisition of new items must be limited to those requirements that are considered essential and must not include upgrading to improve appearance, office décor, status, or to satisfy the desire for the latest design or more expensive item.

c.  Personal property is not replaced just because it has been in use for a specific period of time.

14 FAH-1 H-213  U.S. Government-wide minimum replacement standard

(CT:PPM-14;   06-28-2012)
(Uniform State/USAID)

a. Federal Supply Group (FSG) 39 – Material Handling Equipment:  Material handling equipment will not be replaced unless the estimated cost of necessary one-time repair or reconditioning of each piece of equipment exceeds, at lowest available cost, the applicable percentage of acquisition cost as shown in column 3 of the table at 41 CFR 101-25.405.  Equipment eligible for replacement under the criteria established by this standard may be repaired provided the expected economical life is extended commensurate with the expenditure required.  Prior to incurring repair costs for equipment eligible for replacement, consideration should be given to the continuing availability of repair parts.

b. FSG 23 – Ground Effect Vehicles, Motor Vehicles, Trailers, and Cycles:  The motor vehicle minimum replacement standards specify the number of years in use or miles traveled at which an executive agency may replace a U.S. Government-owned motor vehicle.  A U.S. Government-owned motor vehicle may be replaced sooner than the standards if it needs body or mechanical repairs that exceed the fair-market value of the motor vehicle.  The replacement standard is a minimum only and, therefore, you may keep a U.S. Government-owned motor vehicle longer than shown in 41 CFR 102-34.270 if the motor vehicle can be operated without excessive maintenance costs or substantial reduction in resale value.  You must keep a U.S. Government vehicle for at least the years or miles shown in the table at 41 CFR 102-34.270, unless the motor vehicle is no longer needed and declared excess.

c.  FSG 71 – Furniture:  Furniture (office, household, quarters, and institutional) must not be replaced unless the estimated cost of repair or rehabilitation, including any transportation expense, exceeds at least 75 percent of the cost of a new item of the same type and class.  An exception is authorized in those unusual situations in which rehabilitation of the furniture at 75 percent or less of the cost of a new item would not extend its useful life for a period compatible with the cost of rehabilitation.  Reference 41 CFR 101-25.404.  Additionally, the Department has determined the additional minimum replacement standards for the following types of property:

Federal Supply Group (FSG)

 

Department Minimum Replacement Standard

41 – Refrigeration, air conditioning, and air circulating equipment

 

3 years

61 – Electric wire, power and distribution equipment

(includes 6115 generators and generator sets, electrical)

10 years

70 – Automatic data processing equipment

(includes desktop, laptop, etc)

4 years

71 – Furniture

(office and household)

12 years

72 – Household and commercial furnishings and appliances

(includes mattress)

4 years

73 – Food preparation and serving equipment

 

5 years

74 – Office machines, text processing systems, and visible record equipment

 

8 years

d. Each bureau/office/post evaluates its minimum replacement standard that reflects unusual local conditions.  The bureau/office/post considers the degree of use of the item, extreme climatic conditions, fluctuation of electrical power (if applicable), availability and quality of maintenance and repair facilities, actual past exchange/sale or other local conditions that may influence the minimum replacement standard.

14 FAH-1 H-214  REPLACING personal PROPERTY RECORDED using ILMS

(CT:PPM-14;   06-28-2012)
(State Only)

All Department activities that are using ILMS can refer to the "Items Due for Replacement" when determining which items may need to be replaced within a given year.  This report lists all personal property items that have a replacement year within the range of replacement years, specified when you generate the report via ILMS.  The ILMS report generation process allows the user to further limit the results using the other report parameters, such as select items by designated condition code.  The ILMS user must evaluate the property listed on the ILMS generated "Items Due for Replacement Report" to ensure the minimum replacement standard for certain types of property listed at 14 FAH-1 H-213 that are not based on time are addressed properly.  Additionally, ILMS users must consider the current condition of the property during the determination process for property that will actually be proposed for replacement in a specific year.  ILMS automatically calculates a “replacement date.”  However, ILMS users may set a customized replacement date if needed by specifying a date in the field.

14 FAH-1 H-215  REPLACING PROPERTY NOT RECORDED ON ILMS

14 FAH-1 H-215.1  Replacement Schedule

(CT:PPM-14;   06-28-2012)
(Uniform State/USAID)

Personal property not listed on any property records (see 14 FAM 411.4 for accountable property), may not need a replacement schedule if the property is not critical to operations and replaced only when items actually break down.  A manager may need to use a replacement schedule for personal property not recorded in ILMS.  A replacement schedule is a listing, by fiscal year, of personal property due for replacement.

14 FAH-1 H-215.2  Developing Replacement Schedule Data

(CT:PPM-14;   06-28-2012)
(Uniform State/USAID)

a. Property staff should develop a schedule for replacement based on actual condition; age; degree of use of the item; climatic conditions; fluctuation of electrical power (if applicable); availability; quality of maintenance and repair facilities; and actual past exchange/sale history or other local conditions, which may influence the minimum replacement standard.

b. The first step is to establish an estimated replacement year for each item.  In order to do this, property staff needs to identify the current age of the item.  Age can be determined from the item's acquisition date or manufacturer date, which may be on a label on the property.  If the acquisition date or manufacture date is not on the property records, appraise the item during the next physical inventory and evaluate its life expectancy.

c.  Once property staff has acquired the current age, or an estimated current age, they estimate the life cycle of the item, using the minimum replacement standard (see 14 FAH-1 H-213).  Enter the projected replacement year on the ILMS Asset Management System.  When all of the replacement years have been entered on these records, they can be used to prepare the schedule.

d. Depending on how narrow or broad the categories on the property records are, an alternative to the estimation methods may be reviewing the disposition records to determine how many different types of items have been disposed of during the past 3 or 4 years, and establish a percentage of the total "by type" on hand to be replaced each year.  The danger here is that the types of items grouped on the records may be too dissimilar to be of any value in establishing replacement quantities by "item type" (e.g., office executive swivel chair being one type and office standard swivel chair being another).  Property staff should ensure that items are similar.  For example, office executive swivel chairs should not be combined with office standard swivel chairs under the general heading of "office swivel chairs," nor should office standard side chairs be combined with office standard swivel chairs under the general heading of “office standard chairs” since they are not similar items.

14 FAH-1 H-215.3  Replacement Schedule Preparation

(CT:PPM-14;   06-28-2012)
(Uniform State/USAID)

Property staff preparing a replacement schedule should list the property items that will need to be replaced in the coming years so the property can be readily identified.  The data and format do not matter, as long as the schedule serves the needs of management and budget office.  It is recommended that separate schedules be prepared for office items, household items, and for accountable personal property.

14 FAH-1 H-216  VERIFYING PROPERTY TO BE REPLACED

14 FAH-1 H-216.1  Determination of Personal Property Condition

(CT:PPM-14;   06-28-2012)
(Uniform State/USAID)

Personal property should not be automatically replaced at the end of the estimated life cycle.  Before taking any replacement action, an item should be examined to determine whether its current condition warrants replacement and, if so, whether repair or refurbishing the item could be a less costly alternative.

14 FAH-1 H-216.2  Identifying Excessive Repair Costs Using the ILMS Asset Management System

(CT:PPM-14;   06-28-2012)
(State Only)

Before taking any replacement action, review the Maintenance Detail Report generated from ILMS to identify any items on which excessive repair expenditures have been made.  Make a determination whether to keep the items or to replace them earlier than the estimated replacement year.  The report also provides labor and parts costs for the work.

14 FAH-1 H-217  ADJUSTMENTS

(CT:PPM-14;   06-28-2012)
(Uniform State/USAID)

a. The replacement years listed are estimated replacement years.  In some cases, because of accelerated use, wear, damage, etc., some items will probably have to be replaced ahead of schedule while others, which may continue to be in good condition, will be delayed.

b. Additionally, if your schedule has been developed on a zero-growth forecast for the organization, adjustments may be necessary if changes in personnel, space, etc., occur.

14 FAH-1 H-218  EXCEPTIONS TO SCHEDULED REPLACEMENT

(CT:PPM-14;   06-28-2012)
(Uniform State/USAID)

If still required, keep any item of personal property that is in usable and workable condition even though the prescribed replacement standards would permit replacement, provided that the personal property can be used or operated for the additional period without excessive repair or maintenance costs, or substantially reducing the exchange/sale value of the item.  Additional factors include consideration of the continuing availability of repair parts, as well as the appropriate time for disposition of the item as a saleable, useable item versus having to pay for disposition to a landfill or recycler if retained too long.

14 FAH-1 H-219  FILES

(CT:PPM-14;   06-28-2012)
(Uniform State/USAID)

All work papers and plans concerning the personal property replacement program may be processed in accordance with General Records Schedule 5, Budget Preparation, Presentation, and Apportionment Records, paragraph 2, Budget Background Records, by “Destroy 1 year after the close of the fiscal year covered by the budget" (NC1-GRS-81-13 item 2).

UNCLASSIFIED (U)