Att TBD - MFR Implementing PGI 204.7108.pdf

DEPARTMENT OF THE NAVY

NAVAL AIR WARFARE CENTER AIRCRAFT DIVISION

22347 CEDAR POINT ROAD, UNIT 6

PATUXENT RIVER, MARYLAND 20670-1161

20 May 2020

MEMORANDUM FOR RECORD

From: Aircraft Support Contracts Naval Warfare Center Aircraft Division (NAWCAD)

To: Defense Financing and Accounting Service via Email: dfas.dscc.jal.mbx.ap-mocas-pgi-other12@mail.mil

Subj: IMPLEMENTING PGI 204.7108(d)(12) “OTHER” Payment process in

Solicitation N00421-20-R-0003

Ref: (a) DFARS PGI 204.7108, Payment Instructions Revised 01 December 2017

(b) N00421-20-R-0003 Command, Control, Communications, Computers, and Intelligence (C4I) Operational Maintenance & Engineering Training (COMET)

Appendix: (a) Proposed Payment Instructions – Multiple Customer Funds

Defense Federal Acquisition Regulation Supplement (DFARS) Procedures, Guidance, and Information (PGI) 204.7108 (Ref (a)) provides the current procedures for payment instructions, including a new payment table provided at PGI 204.7108(b (2). Pursuant to DFARS PGI 204.7108(d)(12), the Procuring Contracting Officer (PCO) must seek approval from Defense Finance Accounting Service (DFAS) and the Administrative Contracting Officer (ACO) when implementing payment instructions other than those identified in paragraph (b)(2).

The purpose of this memorandum is to document agreement between the Defense Finance & Accounting Service (DFAS), Defense Contract Management Agency and NAWCAD on the utilization of PGI 204.7108(d)(12) in N00421-20-R-0003, Ref (b). The resultant contract from Ref (b) will be a single award indefinite delivery/indefinite quantity (IDIQ) cost-type contract with several DoD customers providing incremental funding with multiple types of funding, spanning several years. Due to the nature of this contract, the requirements are performed in a fluid environment. In order to accommodate the multiple funding sources and ensure funding is expended properly, the Contracting Officer requests payment is made per direction of the Government. It is understood that this manual payment methodology may increase costs to execute the payment process. However, the benefit to the Navy outweighs the additional costs.

Effective 12/1/2017, DFAS implemented an updated PGI instruction. DFARS PGI 204.7108(b)(1) states that the Contracting Officer shall insert the table at (b)(2) in Section G of the contract, or equivalent, including contracts with incrementally funded line items.

Historically, the NAWCAD Contracting Officers have used DFARS 204.7108(d)(12) - “Other” Payment Instructions successfully. Generally, agencies require their specifically obligated funds to pay the invoice for the work performed, even if it requires payment from an accounting classification reference numbers (ACRN) later in a sequence. Each SLIN providing funding mailto:dfas.dscc.jal.mbx.ap-mocas-pgi-other12@mail.mil mailto:dfas.dscc.jal.mbx.ap-mocas-pgi-other12@mail.mil designates a specific project area/work area that will be identified within each order under a Contract Line Item Number (CLIN). Tracking and reporting of work and execution shall be accomplished at this level through official reporting and contractually required data deliverables.

If multiple ACRNs are associated with a single project/work area under the CLIN it is critical that payment be in accordance with the Contracting Officer approved invoice as the funding lines are not interchangeable. As such, payment by line item specific proration is not applicable, nor are any of the other payment methods outlined in the table at DFARS PGI 204.7108(b)(2).

Allowing NAWCAD Contracting Officers to insert PGI 204.7108(d)(12) – “Other” with specific Contracting Officer payment instructions ensures that each payment under the resultant Task Orders are made in accordance with the specific tasking, ACRNs and CLIN/SLIN numbers shown on each individual invoice. The Contracting Officer will develop detailed invoice instructions and each invoice submitted will strictly follow these instructions. In addition, the Contracting Officer’s Representative (COR), NAWCAD contracts managers and Requiring Activity Government representatives will work closely with the contractor to ensure the invoices follow the established instructions and that the appropriate CLIN/SLIN/ACRN will be properly invoiced for the specific work performed.

As a result, PGI 204.7108(d)(12) will be included in Section G of this contract in accordance with the language stated in Appendix (a) of this memorandum.

The signatories below agree this payment instruction is the best strategy to ensure that future billing aligns with work performed and the appropriate ACRN. By their signatures below, the PCO, Principle Deputy CCO, and DFAS are in agreement with the payment instructions outlined herein.

Thomas E. Stann Procuring Contracting Officer NAWCAD Procurement Group

Alfred W. Hensler III Principal Deputy Chief of Contracting Office, Aircraft Support Contracts Department NAWCAD Procurement Group

Cassandra McDuff Director Accounts Payable MOCAS Defense Finance & Accounting Service

Appendix (a):

Proposed Payment Instructions –Multiple Customer Funds

1. Special Invoice Instructions.

All funding is identified/obligated at the CLIN/SLIN level under this task order. SLINs are established sequentially as obligated. Each obligation of funds may receive a unique SLIN identifier, even if the funds are an increase to an existing line of accounting (ACRN). Each SLIN providing funding designates a specific project/work area. Thus an individual project/work area that is funded incrementally could have one or more ACRNs and could be across multiple SLINs. Accounting for expenditures and invoicing at the SLIN level is required.

The contractor shall be required to track and report at the project/work area/CLIN level. Each identified project/work area shall be invoiced by its associated SLIN and ACRN. If multiple ACRNS are associated with a single project/work area, the contractor shall consult/coordinate with the Contracting Officer for additional invoicing instructions.

2. PAYMENT INSTRUCTION FOR Multiple ACCOUNTING CLASSIFICATION

CITATIONS (REFERENCE: TXT-07B PAYMENT INSTRUCTIONS – OTHER (PGI

204-7108(d)(12))

In accordance with DFARS PGI 204.7108 “Other” (d) (12) INVOICING AND

PAYMENT INSTRUCTIONS FOR MULTIPLE ACCOUNTING CLASSIFICATION

CITATIONS.

This [task order/contract] is a cost-type contract funded by multiple funding types and/or customers, spanning several years. Funding for the CLINs contained in this contract are received from various funding sources and applied to specific tasking as defined in the funding modifications.

(a) Based on the type of work contracted for on behalf of DoD/Navy customers, payment by

CLIN/SLIN/ACRN is significantly important and using any of the payment methods specified in the table identified in PGI 204.7108(b)(2) would result in the funding resources of one customer being paid for work received by another customer. The contractor completes the effort in a fluid environment; therefore, in order to accurately track and account for funding expenditures in accordance with the specific tasking associated with each funding line, payment instruction (d) (12) "Other" applies as expenditures must reflect the actual work performed in alignment with the type of funding.

(b) Payment shall be made in accordance with the Contracting Officer/DCAA approved billing whereby the contractor shall include identification of the CLIN, SLIN, and ACRN on each invoice. This will allow for appropriate contractor invoicing based on the unique customer requirement funding and Contracting Officer’s instructions. This approach also allows for proper matching of the charge to the activity that has received the service/product with the application of the payment to the corresponding entity.