UNCLASSIFIED (U)

14 FAM 120

SUPPLY-CHAIN management

(CT:LOG-256;†† 02-25-2019)
(Office of Origin:† A/LM)

14 FAM 121 †Supply-Chain OVERVIEW

(CT:LOG-256;†† 02-25-2019)

a. Supply chain management encompasses the planning and management of all activities involved in obtaining goods or services. †It involves coordination and collaboration with suppliers, intermediaries, third-party service providers, and customers to integrate supply and demand management across organizations.

b. The steps of the supply chain process include:

(1)† Forecast need(s);

(2)† Make an acquisition (asset or service);

(3)† Fulfill that need;

(4)† Transportation of asset to place of first use;

(5)† Take accountability (ownership or lease) of the asset;

(6)† Storage (inventory management); and

(7)† Disposal/retirement of asset.

c.† The Integrated Logistics Management System (ILMS) is the Department of State's supply-chain web-based management system.† Each ILMS module caters to the needs of the users performing a specific supply-chain task while complying with applicable laws and U.S. Government-wide regulations.† ILMS is managed by the Office of Program Management and Policy in the Office of Logistics Management (A/LM/PMP).† Each ILMS module supports supply-chain functions worldwide, including:

(1)† Acquisition (eInvoicing, Ariba Contracts, Ariba Buyer, Momentum Acquisitions, purchase card, etc.);

(2)† Travel and transportation;

(3)† Warehouse management (expendable and nonexpendable supplies);

(4)† Personal property management, fleet operations (Fleet Management Information System);

(5)† Diplomatic pouch and mail;

(6)† Federal financial assistance;

(7)† EFiling; and

(8)† Receiving (final receipt).

d. The supply-chain functions and various ILMS modules are addressed in more detail within the subchapters of 14 FAM as listed in 14 FAM 111, paragraph b.

14 FAM 122 †Planning

(CT:LOG-256;†† 02-25-2019)

a. A purchase requirement begins with a determination of operational need, and should be submitted well in advance of the fiscal year end for funding purposes.† A genuine need for the acquisition must exist prior to its purchase, as defined by a need to:

(1)† Preserve a current capability through maintaining or replenishing inventory;

(2)† Improve an existing capability;

(3)† Reduce cost or enhance performance; or

(4)† Establish a new operational capability.

b. Acquisitions consist of various methods to obtain personal property to support operation requirements of the Department of State, and include the following:

(1)† Reutilization:† The first source of supply is the use of excess personal property. †When practicable, agency personnel must make efforts to satisfy requirements by obtaining and using excess personal property from within the agency or from other U.S. Government agencies prior to any contract action to purchase or lease (see 48 CFR 8.102).† A search of GSAXcess or the ILMS excess property catalogue for needed new- or used-condition property, including items suitable for adaptation or substitution, must be initiated prior to any contract action to purchase or lease;

(2)† Purchase new, used, lease or rent:† Each Agency must develop an acquisition plan each fiscal year which considers the lifecycle cost of goods and services.† The acquisition plan helps determine whether goods will be purchased, leased (including short-term rent), or fabricated as the best alternative to meeting agency operational requirements.† The acquisition plan and approval process provides internal controls for the prevention of misappropriations or unauthorized procurements; and

(3)† Fabricate:† Consideration of in-house fabrication expertise and capacity are critical factors when deciding that available commercial goods do not meet operational requirements and can only be met by internal fabrication.

c.† Several tools are available to help asset managers determine when and how much to order with respect to maintaining expendable and nonexpendable stock levels of regularly issued items (see 14 FAH-1 H-419).† For requirements that fall outside the realm of cyclical replenishment orders (e.g., emergency orders, exceptions, or one-time purchases), the requestor must submit a requisition justifying the need.† In general, urgent or unrealistic delivery schedules should be avoided since they restrict competition and increase prices (see FAR 6.302-2).

d. Weighing competing priorities of legitimate needs with fiscal responsibility, the accountable property officer (or delegated alternate) determines whether to approve a request or reuse property already on hand to satisfy that need.† See 14 FAM 200 for further details on requirements determination and acquisitions and 14 FAM Exhibit 221.3 for any specific approvals needed.

e. Acquisition begins when agency needs are established and includes the description of requirements to satisfy agency needs, solicitation and selection of sources, award of contracts, contract financing, contract performance, contract administration, and those technical and management functions directly related to the process of fulfilling agency needs by contract.

14 FAM 123 †Acquisition (How To Buy)

(CT:LOG-256;†† 02-25-2019)

a. Submitting a requisition initiates a series of events.† These include the approval process, order placement, confirmation of receipt, and payment to the vendor to close out the purchase file.† Various offices have responsibilities in the acquisition process, to include procurement, budget and finance, property management, warehousing, shipping, the requestor, and the vendor.

b. The Department of State Acquisition Regulation (DOSAR) is issued as Chapter 6 of Title 48, Code of Federal Regulations.† The DOSAR implements and supplements the Federal Acquisition Regulation (FAR).† See 14 FAM 200 for more details on acquisitions in general; 5 FAM 900 for information technology acquisitions; and 15 FAM for overseas buildings and construction acquisitions.† The Office of the Procurement Executive (A/OPE) has several links for procurement planning from the A/OPE Intranet website.

c.† Department of State acquisitions are conducted by post general services office (GSO) procurement sections, regional procurement support offices, the Office of Acquisitions (A/OPE/AQM), and other domestic activities as authorized by A/OPE.† On occasion, the procurement may be conducted by another agency, e.g., USAID, as an International Cooperative Administrative Support Services (ICASS) service provider at post.

d. The purchase card program presents an important option for making acquisitions.† This worldwide program typically affects smaller purchases (less than $10,000) though higher amounts may be authorized under the program.† Key program administrators (KPAs) in A/OPE/AQM manage the program for each regional bureau and for domestic offices.† A/OPE has program policy information, program manual, and other guidance on its Intranet website.

e. Ariba is the main Integrated Logistics Management System (ILMS) module for entering requests, tracking the approval process, placing orders, and approving payment for orders received.

14 FAM 124 †Transportation:† Official Supplies and Equipment

(CT:LOG-256;†† 02-25-2019)

a. The regulations for transporting official supplies and equipment are detailed (see 14 FAM 310) and address a number of different scenarios.† Various considerations when determining shipment needs include the following:

(1)† Point of origin of shipment;

(2)† Destination of shipment;

(3)† Shipment mode (e.g., air or sea);

(4)† Nationality of carrier;

(5)† Use of consolidation receiving points and Despatch Agents; and

(6)† Type of property to be shipped (e.g., perishable, temperature-sensitive, time-sensitive, or hazardous material).

b. The Office of Logistics Managementís Office of Logistics Operations (A/LM/OPS) establishes procedures for managing the transportation of supplies and equipment for the Department, domestic field offices, and U.S. missions abroad.† A network of consolidated receiving points (CRPs), Despatch Agents, and warehouses make up this worldwide service.

14 FAM 125 †Asset Management

(CT:LOG-256;†† 02-25-2019)

a. Asset management encompasses the functions of receiving, storage, replenishment, issuing, tracking, inventory, and disposal of U.S. Government-owned personal property (see 14 FAM 400 and 14 FAH-1).† The ILMS Asset Management module must be used for tracking and accountability purposes.† Similarly, complete files of receiving reports, outstanding purchase orders, disposal reports, and all issue/return forms, must be kept for a specific period of time as directed by 5 FAM 400 and 5 FAH-4.† The document management disposition schedules are published by A/GIS/IPS.

b. When storing property, the accountable property officer must implement an efficient and economical warehousing program with written procedures for the handling and storage of property.† Special consideration must be given to the following:

(1)† Secure and/or controlled areas for storing high-value equipment and supplies subject to theft or deterioration;

(2)† Consolidation of facilities across agencies abroad to maximize use of space and administrative costs;

(3)† Segregation of flammable, combustible, or hazardous materials from general storage by the use of Underwriters Laboratories (UL)-listed containers specifically made for that purpose, or constructing fire-rated walls and doors with appropriate fire protection and ventilation;

(4)† Appropriate storage techniques (e.g., lifts, shelving, racks);

(5)† Adequate ventilation;

(6)† Establishment of overall safety and security procedures; and

(7)† To ensure the safety of mission personnel and property, employees must properly secure and store all materials that can be used as improvised weapons, including, but not limited to, flammable liquids, paint, hand tools, power tools, rebar, rigid conduit, loose scaffolding, and other loose construction materials or equipment. †Such property must be stored as securely as possible when not in use to prevent access from unauthorized persons. †See 14 FAH H-310 on receipt and storage procedures worldwide.

c.† In general, a physical inventory of accountable property and ILMS expendables must be performed and reconciled annually.† For inventory due dates, see 14 FAM 416 and 14 FAM 419 for posts abroad, and 14 FAM 429 for domestic offices.† The Office of Logistics Managementís Property Management Division (A/LM/PMP/PM) monitors accountability of these assets across the entire Department.

d. The Integrated Logistics Management System (ILMS) module used for tracking accountable property through its life cycle, including taking inventories, is ILMS Asset Management.

14 FAM 126 †Repairs

(CT:LOG-256;†† 02-25-2019)

a. Once an asset has been acquired, it is prudent to maximize its usable life.† To this end, maintenance and repair play a crucial role in prolonging the life of assets already in service, thereby minimizing overall replacement costs.† That being said, there is a point where the cost of frequent maintenance exceeds the replacement cost, especially considering the potential inconvenience to the assetís users during maintenance, and replacement is appropriate.

b. Tracking the maintenance history is mandatory for capitalized property (e.g., vehicles, machinery) and aids in the decision of whether to keep or replace an item.† Several factors can come into play when making replacement decisions, including in-house maintenance (how busy are they there?), contracted maintenance (surcharges, repeat service due to lack of familiarity or skill), budget cycles, and the expected life of similar items on hand.

c.† See 5 FAM 520, 5 FAM 925, 5 FAM 1040, 12 FAM 600, and 12 FAH-6 for additional information technology (IT) and telecommunications repair requirements.

14 FAM 127 †Disposal

(CT:LOG-256;†† 02-25-2019)

a. In order to keep warehouses and offices from overflowing there is also an inherent necessity to remove old or obsolete property.† When an employee deems property to be no longer useful, efficient, contemporary, or desirable, that employee reports it to the general services office for reassignment either to another office or to the warehouse.† The top reasons to dispose of property on a regular basis are to:

(1)† Avoid safety hazards;

(2)† Get rid of broken or worn-out property;

(3)† Apply the replacement cycle;

(4)† Free up valuable space; and

(5)† Save time and money by not having to account for this property on current records.

b. There are several ways to dispose of property, and a specific order in which each method must be attempted (see 14 FAM 417).

c.† The Office of Logistics Managementís Property Management Division (A/LM/PMP/PM) provides guidance for the disposal of domestic excess property.† The range of options available at posts abroad may be limited, so the general services office (GSO) must determine the best course of action.

14 FAM 128 †and 129 unassigned

UNCLASSIFIED (U)