There are different business systems which are applicable in the government. There are six business systems that include the following:
- Accounting – This applies to the Billing, Labor, Indirect Costs, Budgeting, Compensation, and EDP Controls.
- Estimating – This is an acceptable system that gives a use of right source data, consistent approach, sound estimating judgment, and the adherence to established processes and policies.
- Purchasing – This needs to subcontract and purchasing systems to include the make or buy decisions, price negotiation, training, vendor section justification, internal audits, and management reviews.
- Government Property – This makes sure that there is compliance with the government property clauses of the contract.
- Earned Value Management Systems – This is the description of the company’s approach to the program organization, work authorization, indirect cost management, corrective actions, scheduling and budgeting, accounting, and managerial analysis.
- Material Management (MMAS) – This describes the system of planning, accounting for the acquisition, disposition, use, controlling, and issuing of the material. These should also comply with the “Ten Key Elements” of a sufficient system.
The ten key elements of material management or MMAS are:
- Having sufficient system description, processes, policies, and operating instructions.
- Having a valid time-phased need with 98% accuracy for BOM and 95% accuracy for MPS.
- They should also give a mechanism to report, know, and resolve the control weaknesses of the system.
- They should also give audit trains and have the records maintained.
- They should also keep up the 95% accuracy of the physical inventory records
- They should also give a detailed description of the circumstances which will result to either manual or system generated parts transfer.
- They should also keep up a consistent, unbiased, and fair logic for the costing of material transactions.
- They should also keep up the controls for allocation from the common inventory.
- They should also keep up the control on the physical commingled inventories.
- They should make sure of the compliance in the government standards through the internal audits.