Introduction and Overview
THIS IS A REQUEST FOR INFORMATION ONLY. THERE IS NO SOLICITATION ASSOCIATED WITH THIS REQUEST. The Naval Air Systems Command (NAVAIR) is requesting information pertaining to Final Rule: Payment Instructions (DFARS Case 2017-D036) effective 25 May 2023 and to be implemented starting 1 Oct 2023. Specifically, the subject of this request pertains to the impacts of the following change: paragraph (d)(12) of the Procedures, Guidance, and Information (PGI), which previously allowed the Contracting Officer to insert other payment instructions, has been deleted. Therefore, use of payment instructions not outlined in the DFARS PGI is no longer authorized. The purpose of this RFI is to assess the predicted impact to industry of this change and to solicit industry inputs on potential alternative solutions.
Background
Financial reporting requirements are increasing in complexity due to DOD/NAVY's audit readiness programs. This amounts to traceability of funding from a variety of customers to the work being performed for those customers. Due to the large number of funding sources, appropriation types, and unique individual programs supported, the government's traditional service contract structures do not allow for a single fund line on each CLIN for sequential payment of ACRNS or prorated payment against all ACRNs. The principle method to ensure this traceability in all types of Naval Air Warfare Center-Aircraft Division (NAWCAD) Contracts and Task Orders was the utilization of Technical Direction Letters and INFOSLINs combined with the NAVAIR Clause 5252.242.9502 Technical Direction (Variation) in Section H of the contract and the insertion of other payment instructions by the Contracting Officer. The other payment instructions, in accordance with the now deleted DFARS PGI 204.7108(d)(12), provided an accurate alignment of work completed and funds expensed. The tailored instructions allowed flexibility for payments to be made in accordance with shifting requirements and customer needs without the need of a bi-lateral contract modification to realign ceiling on CLINs and/or Sub-CLINs. Contractors were directed to identify the CLIN, SLIN, and ACRN on each invoice based on the unique customer funding requirement, PCO instructions, and/or Technical Direction Letter (TDL). The intention of this method was to reduce the complexity of the overall contract CLIN structure while maintaining the appropriate traceability of funding to the actual work performed.
The deletion of DFARS PGI 204.7108(d)(12) other payment instructions remove the ability of the Government to effectively utilize TDLs in structuring and financially administering the contract. Recent contracts issued by NAWCAD included a simplified CLIN structure by APPN and utilized TDLs with numeric INFOSLINs to provide segregation of funds and tasking. For example, using a single appropriation type:
CLIN 0001 RDT&E Labor
SLIN 000101 RDT&E Labor Project A /TDL 0001
SLIN 000102 RDT&E Labor Project B /TDL 0002
CLIN 0002 RDT&E Travel
SLIN 000201 RDT&E Travel Project A /TDL 0001
SLIN 000202 RDT&E Travel Project B /TDL 0002
CLIN 0003 RDT&E Material
SLIN 000301 RDT&E Material Project A /TDL 0001
SLIN 000302 RDT&E Material Project B /TDL 0002
Theoretically, utilizing a requirement that provides services to 19 different funding sources, 5 different appropriation types, 5 years of performance using 1 base year and 4 option years, and three charge types (labor, travel, material), a requirement utilizing TDLs would result in 125 basic CLINs. With the deletion of the other payment, a unique CLIN would be required for each configuration of purpose/project, appropriation, performance year, and type resulting in 1,425 unique CLINs by Line Of Accounting (LOA) as defined in DFARS 204.7103-1, to achieve the same level of fiscal traceability.
RFI Response Instructions
Responses to the RFI should be submitted electronically to amy.g.davis.civ@us.navy.mil no later than 1100, 21 AUG 2023.
The information shall be submitted as UNCLASSIFIED.
Do not submit any documents (letters, corporate statements or marketing information) other than the directly requested information.
The Government may elect not to discuss submissions received in response to this RFI with individual responders or the collective summary of responses with Industry as a whole.
Please complete and return the following RFI questionnaire in MS Word or .PDF format.
Response to Request for Information in regards to DFAR 252.204-7006, Billing Instructions-Cost Vouchers
Contractor Name: _______________________________
Contractor Cage: _______________________________
Contractor Point of Contact (POC): _______________________________
Contractor POC email address: _______________________________
Contractor Address: _______________________________
Contractor Phone Number: _______________________________
Contractor Size Status under NAICS code 541330 ($47M): _______________________________
A. Do any of your current contracts utilize the DFARS PGI 204.7108(d)(12) other payment instructions?
B. Provide a projected impact with the removal of DFARS PGI 204.7108(d)(12) other payment instructions.
- Provide a projected impact of the timeline for the preparation and submittal of invoices / cost vouchers
- Provide a project impact on the preparation and quality assurance activities associated with financial Contract Data Requirements List (CDRL) deliverables
- Provide a projected impact on Industry's overhead costs as it relates to the increased number of CLINS to be managed (or task orders to be managed in the case of IDIQs) in place of TDLs combined with payment other ? If able to do so, please provide a projection assuming 80-100 CLINS per year on C type contracts. As for IDIQs, assume 8-10 task orders per year with approximately 10 CLINs on each.
- Provide a projected impact on your financial management tools and processes to accommodate this change.
- Provide a projected impact on the management and traceability of Hours, Cost, and Fee across the increased number of CLINs, specifically with regards to managing re-alignments, de-obligations, and other activities.
- Is there anything additional the Government should be aware of as it relates to a potential impact to Industry of the deletion of DFARS PGI 204.7108(d)(12) other payment instructions?
C. Provide any recommendations to alternative approaches to CLIN structures or other contract financial management methods to achieve the intended goal.
