DoD, NASA, and the GSA have proposed a new rule that would change the federal acquisition regulation to establish a uniform line item structure for the Federal procurement system. The rationale for the change is that a uniform line item identification structure would improve the accuracy, traceability, and usability of procurement data. It is also part of the effort to implement the objectives of the Federal Funding Accountability and Transparency Act of 2006, including promoting achievement of rigorous accountability of procurement dollars and processes.
The new rule would apply to solicitations, government-wide acquisition contracts, multi-agency contracts, purchase orders, agreements involving pre-priced supplies or services, and delivery orders. If approved, the change would become effective in FY 2016.
This is a significant change, as companies submitting cost-price proposals requiring certified cost or pricing data would need to show relationships between line or sub-line items and total contract price. Further, they would have to attach cost-element breakdowns for each proposed line or sub-line.
The proposed rule could require some contractors to restructure their proposal pricing process as well as their systems to accommodate the line item identification system. This change may also require contractors to make changes to their pricing and electronic systems and to develop more extensive pricing data to conform to a new line item structure. Those who already have contracts with DoD would not be affected by the rule because these identification standards are already in use.
Crowell & Moring’s government contracts team is available to discuss the proposed rule and assist clients with submitting comments.