DoD Issues Final Rule on Alternative Line Item Structure

September 20, 2011

DoD is issuing a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to establish a standard procedure for offerors to propose an alternative line item structure that reflects the offeror's business practices for selling and billing commercial items and initial provisioning spares for weapon systems. Effective Date: September 20, 2011.
Federal Register Volume 76, Number 182 (Tuesday, September 20, 2011).

DoD published a proposed rule in the Federal Register at 76 FR 21847 on April 19, 2011, to add DFARS language that provides offerors the opportunity to propose an alternative line item structure in solicitations for commercial items and initial provisioning spares. This DFARS change will allow offerors to provide information about their products that may not have been known to the Government prior to issuance of the solicitation. No public comments were received regarding the proposed rule.

DoD identified the need to propose an alternative line item structure during process reviews and working group sessions that assessed destination-acceptance procedures. The process reviews performed by DoD cross-service working groups, which were chartered by the Defense Finance and Accounting System, examined issues causing problems in the receipt and acceptance phase for contract deliverables and payments.

This group determined that the level of detail in the requirements description and line item structure is not always sufficient for delivery, payment, and subsequent inventory management of the items delivered. For example, the contract line item may be for a desktop computer, but the actual items delivered, invoiced, and inventoried may reflect a separate monitor, keyboard, and central processing unit. The resultant misalignment of transaction detail (i.e., contract line item, invoiced unit, delivery and inventory unit) is the cause of failures in the electronic processes of the DoD's business enterprise requiring manual intervention with potential delays in contractor payment. To address this recurring problem, this rule establishes and standardizes a process to enable offerors to propose changes in their offer to the solicitation's line item structure. Establishing such a process is a first step towards managing variation in these transactions by eliminating or reducing manual intervention.

FOR FURTHER INFORMATION CONTACT: Mr. Julian E. Thrash, 703-602-0310. 






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