Attachment_0007,_DoD_Guide_UID_v3.0.pdf

Department of Defense Guide to Uniquely Identifying Items

Assuring Valuation, Accountability and Control of Government Property

Version 3.0 December 2, 2014

Office of the Under Secretary of Defense (Acquisition, Technology & Logistics)

Attachent 0007 ii

Preface

INTENDED USERS

This guide is intended for use by Department of Defense (DoD) contractors and their suppliers who apply item unique identification (IUID) Data Matrices1 to new items during production, as directed in the contract.

This guide is also intended for use by the DoD Components and their agents, who are required to apply IUID Data Matrices on applicable legacy items in inventory and in operational use.

Within these user communities, the targeted audience is the user of automatic identification technologies, such as barcodes and barcode readers.

SUMMARY OF GUIDE CHANGES

This Version 3.0 of the Department of Defense Guide to Uniquely Identifying Items replaces all previous versions.

Summary of changes from Version 2.5 (Dated September 15, 2012) to Version 3.0:

a. Content changes were incorporated in the basic document:

(1) To clarify applicability of the IUID marking criteria in the current edition of Defense Acquisition Regulations Supplement (DFARS) 211.274-2 for new acquisition items delivered under contracts.

• The decisions trees in Figures 1 and 2 were updated.

• Changes were made to align with the content of current editions of referenced DoD issuances that were revised since the publication of Version 2.5.

• Strategies for minimizing the impacts of non-recurring engineering were included.

1 For the purpose of this document, the term “IUID Data Matrix” is used to describe a Data Matrix symbol compliant with all DoD IUID policies and business rules. This is equivalent to the terms “UII Data Matrix Symbol”, “IUID compliant Data Matrix”, “IUID MRI mark”, and “Data Matrix containing the UII data set” used in other IUID documents. A Data Matrix not meeting all DoD IUID policies and business rules is referred to as a “non-compliant Data Matrix”. The term “Data Matrix” is used to describe a Data Matrix barcode which may or may not meet all DoD IUID requirements.

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(2) All the definitions in Appendix A were validated against the latest version of their authoritative source.

(3) Appendix B references were updated to reflect the latest versions. DoD 4041.1-R was deleted and DoD Instruction (DoDI) 4140.01 and DoD Manual (DoDM) 4140.01, Volumes 1 through 11, were added.

b. GFP content was removed as it was redundant with the provisions in DoDI 4161.02, Accountability and Management of Government Contract Property.

c. Appendix D was revised to delete the use of serialization within the lot number within a part number.

d. Table 5 in Appendix D was revised to delete the Text Element Identifier (TEI)

“LOT ”.

e. Table 7 was revised to delete the use of the four-element unique item identifier (UII) constructs for serialization within the lot number within the part number.

f. Sections were reorganized to remove redundancy and align content.

g. Changes were made to achieve consistent use of acronyms.

h. The use of the words "shall", "must", "should", "can", "may" and "will" were edited to ensure their usage accurately reflects policy.

i. Changes for compatibility with the changes reflected above, as well as various format corrections, were made throughout.

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Table of Contents Preface................................................................................................................................ ii

Intended Users ............................................................................................................... ii Summary of Guide Changes .......................................................................................... ii

List of Figures ........................................................................................................... vi List of Tables ............................................................................................................ vi

1. The Environment

1.1. The Government Property Management Challenge

1.2. Item Unique Identification

1.2.1. The Definition of Item

1.3. The Objectives

1.4. Item Management

1.5. The Players

1.5.1. Engineering Management

1.5.2. Acquisition Management

1.5.3. Property and Equipment Accountability

1.5.4. Logistics Management and Accountability

1.5.5. Financial Management

1.5.6. Asset Visibility

1.6. Processes, Activities and Actions

2. The Need to Uniquely Identify Items

2.1. Differentiating Items Throughout the Supply Chain

2.2. Accounting for Acquired Items

2.3. Contractor-acquired Property on Cost-Reimbursement Type Contracts

2.4. Establishing Item Acquisition Cost

2.4.1. Using Contract Line Items

2.4.2. Valuation of Items

3. Requirements for IUID

3.1. What is an Item?

3.2. Deciding What Items are to be Identified as Unique

3.2.1. Items Delivered Under Contracts

3.2.2. Legacy Items

3.2.3. Context and Scope of Decision Criteria

3.2.3.1. DoD Serially Managed

3.2.3.2. $5,000 Unit Acquisition Threshold

3.2.3.3. Mission Essential Items

3.2.3.4. Controlled Inventory Items

3.2.3.5. Warranted Serialized Items

3.2.3.6. Special Tooling for Major Defense Acquisition Programs

3.2.3.7. High Risk Items

3.3. Special Topics

3.3.1. IUID of Sets, Kits, and Outfits

3.3.2. Legacy Items Not Requiring IUID Marking and Registration

4. Determining Uniqueness of Items

4.1. What is the UII?

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4.1.1. Defining the Data Elements for the UII

4.1.2. DoD Recognized IUID Equivalents

4.1.3. The Notion of an Enterprise

4.1.4. The Notion of an Issuing Agency

4.2. Creating an IUID Data Matrix

4.3. Marking an Item with an IUID Data Matrix

4.3.1. Deciding Where to Place an IUID Data Matrix on an Item

4.3.1.1. Marking Items with Severe Space Limitations

4.3.1.2. Strategies for Minimizing Non-Recurring Engineering

4.3.2. Deciding When to Place the IUID Data Matrix on the Item

4.3.2.1. Vendor-Applied-at-Source

4.3.2.2. Opportunity-Based

4.3.2.3. Seek-and-Apply

4.3.2.4. Gated

4.3.3. Virtual UIIs

4.4. Use of UIIs in AISs

4.4.1. Derivation of the UII

4.4.2. UII Derivation Process

4.5. Roles and Responsibilities for Property Records

4.5.1. Property Accountability

4.5.2. Materiel Management of Secondary Items

4.6. Through-Life Traceability of UII Items in the DoD IUID Registry

4.6.1. Obtaining User Access to the DoD IUID Registry

4.6.2. Initial Item Registration

4.6.3. Item Update

Appendix A - Definitions Key Definitions

Appendix B - Where Does the Guidance Exist Today?

Appendix C - Business Rules (Version 4.1)

What are Business Rules?

IUID Business Rules Contracts and Administration UII Construction and Physical Marking

Items Considered Part of a New Solicitation Creating and Generating the UII Parent-Child Relationships Metadata Requirements Capturing the UII Using the UII

Legacy Items in Operational Use or in Inventory Items Considered Tangible Personal Property Owned by the Government in the Custody of a Contractor that Have Not Been Previously Marked

Appendix D - The Mechanics of IUID Structuring the Data Elements for IUID

Semantics Syntax vi

Examples of Semantics and Syntax Constructions for IUID Using ANS MH10 DIs Using GS1 AIs Historic Use of TEIs The Collaborative AIT Solution Using TEIs

Appendix E - Glossary of Terms

List of Figures Figure 1. Uniquely Identifying Items Delivered Under Contract Figure 2. Uniquely Identifying Legacy Items in Inventory or Use Figure 3. Different IUID Data Matrices, Same UII Figure 4. Considerations in MRI Part Marking Figure 5. UII Determination Process

List of Tables Table 1. Functional Processes Impacting Item Management Table 2. Contract Requirements – Identifying Unit Acquisition Cost Table 3. Legacy Items Exempt from Marking and Registering Table 4. Issuing Agency Codes Table 5. Data Qualifiers for IUID Usage Table 6. UII Construction for AIs (Format Indicator 05) Table 7. UII Construction for DIs (Format Indicator 06) Table 8. UII Construction for TEIs (Format Indicator 12) Table 9. Examples of the Use of DIs in Construct #1 Serialization within the Enterprise (Format Indicator 06 of ISO/IEC 15434) Table 10. Example of the Use of DIs in Construct #1 Serialization within the Enterprise with Additional Item Data (Format Indicator 06 of ISO/IEC 15434) Table 11. Example of the Use of DIs in Construct #2 Serialization within the Original Part Number (Format Indicator 06 of ISO/IEC 15434) Table 12. Example of the Use of DIs in Construct #2 Serialization within the Lot Number (Format Indicator 06 of ISO/IEC 15434) Table 13. Example of the Use of DIs in Construct #2 Serialization within the Original Part Number with Additional Item Data (Format Indicator 06 of ISO/IEC 15434) Table 14. Example of the Use of AIs for GIAI using the Individual Asset Reference Number (Format Indicator 05 of ISO/IEC 15434) Table 15. Example of the Use of AIs for GIAI using the Serialized GTIN™ (Format Indicator 05 of ISO/IEC 15434) Table 16. Example of the Use of TEIs for UII Construct #1, Manufacturer Serialization (Format Indicator 12 of ISO/IEC 15434) Table 17. Example of the Use of TEIs for UII Construct #1, Enterprise other than Manufacturer (Format Indicator 12 of ISO/IEC 15434) Table 18. Example of the Use of TEIs for UII Construct #2, Serialization within the Original Part Number (Format Indicator 12 of ISO/IEC 15434)

1. The Environment

1.1. THE GOVERNMENT PROPERTY MANAGEMENT

CHALLENGE

The Government Accountability Office (GAO) aptly describes the challenge faced by today’s managers of Federal Government property: “GAO and other auditors have repeatedly found that the federal government lacks complete and reliable information for reported inventory and other property and equipment, and cannot determine that all assets are reported, verify the existence of inventory, or substantiate the amount of reported inventory and property. These longstanding problems with visibility and accountability are a major impediment to the federal government achieving the goals of legislation for financial reporting and accountability. Further, the lack of reliable information impairs the government’s ability to (1) know the quantity, location, condition, and value of assets it owns, (2) safeguard its assets from physical deterioration, theft, loss, or mismanagement, (3) prevent unnecessary storage and maintenance costs or purchase of assets already on hand, and (4) determine the full costs of government programs that use these assets. Consequently, the risk is high that the Congress, managers of federal agencies, and other decision makers are not receiving accurate information for making informed decisions about future funding, oversight of federal programs involving inventory, and operational readiness”2. Further, the Congress has demanded greater fiscal accountability from managers of federal government property3.

1.2. ITEM UNIQUE IDENTIFICATION

In response to the need to improve fiscal accountability and government property management, the DoD has mandated IUID to enable item life cycle visibility, management, and accountability.

IUID requires the assignment of a globally unique UII to new acquisition and legacy items meeting DoD-specified criteria. This UII is encoded into an IUID Data Matrix and applied to the item, as well as registered with respective item information in the DoD IUID Registry.

2 GAO-02-447G, Executive Guide, Best Practices in Achieving Consistent, Accurate Physical Counts of Inventory and Related Property, March 2002, page 6.

3 Ibid., page 5: The GAO observes that “In the 1990s, the Congress passed the Chief Financial Officers Act of 1990 and subsequent related legislation, the Government Management Reform Act of 1994, the Government Performance and Results Act of 1993, and the Federal Financial Management Improvement Act of 1996. The intent of these acts is to (1) improve financial management, (2) promote accountability and reduce costs, and (3) emphasize results-oriented management. For the government’s major departments and agencies, these laws (1) established chief financial officer positions, (2) required annual audited financial statements, and (3) set expectations for agencies to develop and deploy modern financial management systems, produce sound cost and operating performance information, and design results-oriented reports on the government’s financial position by integrating budget, accounting, and program information. Federal departments and agencies work hard to address the requirements of these laws but are challenged to provide useful, reliable, and timely inventory data, which is still not available for daily management needs.”

The Environment

1.2.1. The Definition of Item

For the purposes of this guide, an item is a single hardware article or a single unit formed by a grouping of subassemblies, components, or constituent parts4.

1.3. THE OBJECTIVES

DoD Directive (DoDD) 8320.03, Unique Identification (UID) Standards for a Net- Centric Department of Defense, provides for UID data standards development and implementation of the Department’s UID strategy. It establishes policy and prescribes the criteria and responsibilities for creation, maintenance, and dissemination of UID data standards for discrete entities to enable on-demand information in a net-centric environment, which is an essential element in the accountability, control, and management of DoD assets and resources. It also establishes policy and assigns responsibilities for the establishment of the Department’s integrated enterprise-wide UID strategy and for the development, management, and use of unique identifiers and their associated authoritative data sources in a manner that precludes redundancy5. IUID is the fundamental element of the Department’s strategy for the management of its tangible items of personal property. DoDI 8320.04, Item Unique Identification (IUID) Standards for Tangible Personal Property, has been issued for policy implementation.

DoDI 5000.64, Accountability and Management of DoD Equipment and Other Accountable Property, requires accountability records be established for all Government property with a unit acquisition cost of $5,000 or more and items that are sensitive or classified, regardless of acquisition cost. Property records and/or systems are to provide a complete trail of all transactions, suitable for audit6.

DoDI 4140.01, DoD Supply Chain Material Management Policy, requires accountability and inventory control requirements for all secondary items of property and materiel received in the wholesale supply system.

A key component of effective property management is to use sound, modern business practices.

In terms of achieving the desirable end state of integrated management of items, the collective DoD goal shared by all functional processes involved in property management is to uniquely identify items, while relying to the maximum extent possible on international standards and commercial item markings and not imposing unique Government requirements. Unique identification of items will help achieve:

4 DFARS 252.211-7003(a).

5 Redundancy occurs when the same item is assigned multiple UIIs.

6 Property accountability records and systems shall contain the data elements specified in DoDI 5000.64, Enclosure 3, paragraph 6.0, including part number, cost, national stock number, UII or DoD recognized IUID equivalent, and other data elements listed.

• Integration of item data across Federal and industry asset management systems, as envisioned by the DoD Business Enterprise Architecture (BEA)7, to include improved data quality and global interoperability and rationalization of systems and infrastructure.

• Improved item management and accountability.

• Improved asset visibility and life cycle management.

• Clean audit opinions on item portions8 of DoD financial statements.

1.4. ITEM MANAGEMENT

The acquisition, production, maintenance, storage, and distribution of items require complete and accurate asset records to be effective, and to ensure mission readiness. Such records are also necessary for operational efficiency and improved visibility, as well as for sound financial management. Physical controls and accountability over items reduce the risk of (1) undetected theft and loss, (2) unexpected shortages of critical items, and

(3) unnecessary purchases of items already on hand.

1.5. THE PLAYERS

Program managers and item managers lead the coordinated efforts of various stakeholders. The principal functional stakeholders in item management are Engineering Management; Acquisition Management; Property and Equipment Accountability;

Logistics Management and Accountability; and Financial Management. Asset visibility is crosscutting to these five functions. Their interests involve the following:

1.5.1. Engineering Management

DoDD 5000.01, Defense Acquisition System, requires acquisition programs be managed through the application of a systems engineering approach that optimizes total system performance and minimizes total ownership costs. A modular, open-systems approach is employed, where feasible. For purposes of item management, engineering plays a crucial role in the documentation of technical data that defines items and the configuration management of these items throughout their useful life.

1.5.2. Acquisition Management

The Federal Acquisition Regulation (FAR) Part 45, Government Property, prescribes policies for furnishing Government property to contractors including the use, maintenance, management and reporting of Government-furnished property and contractor-acquired property, and for the return, delivery, or disposal of Government-furnished property and contractor-acquired property.

7 The BEA defines the processes, roles, data structures, information flows, business rules, and standards required to guide improvements in the Core Business Missions of the Department.

8 These financial statement portions are (1) Property, Plant and Equipment and (2) Operating Materials and Supplies.

1.5.3. Property and Equipment Accountability

DoDI 5000.649 provides a comprehensive framework for DoD property accountability policies, procedures, and practices; and assists DoD property managers, accounting and financial officers, and other officials in understanding their roles and responsibilities relating to property accountability. It establishes accountability and management policy for tangible DoD-owned equipment and other accountable property; and contains concepts useful for asset management throughout the Department, particularly for property in the possession of individual military units and end-users. It excludes property and materiel for which accountability and inventory control requirements are prescribed in DoDI 4140.01, DoDM 4140.01 and Defense Logistics Manual (DLM) 4000.25-210.

1.5.4. Logistics Management and Accountability

DoDI 4140.01, Supply Chain Materiel Management Policy, specifies policies for materiel management. It is the Department’s policy that:

• Materiel management is responsive to customer requirements during peacetime and war.

• Acquisition, transportation, storage, and maintenance costs are considered in materiel management decisions.

• Standard data systems are used to implement materiel management functions.

• The secondary item inventory is sized to minimize the Department's investment while providing the inventory needed to support peacetime and war requirements.

• Materiel control and asset visibility are maintained for the secondary item inventory.

DLM 4000.25, Defense Logistics Management System (DLMS), prescribes logistics management policy, responsibilities, procedures, rules, and electronic data communications standards for the conduct of logistics operations in the functional areas of supply, transportation, acquisition (contract administration), maintenance, and finance11.

1.5.5. Financial Management

DoDI 7000.14, Department of Defense Financial Management Policy and Procedures, specifies that all DoD Components shall use a single DoD-wide financial management regulation for accounting, budgeting, finance, and financial management education and

9 DoDI 5000.64 integrates the broad requirements of the Federal Property and Administrative Services Act of 1949, as amended (Act of 30 June 1949, 63 Stat. 372), and the Chief Financial Officers (CFO) Act of 1990 into an overarching property accountability policy for property, plant and equipment. This instruction complements the accounting and financial reporting requirements contained in DoD 7000.14-R.

10 Military Standard Transaction Reporting and Accounting Procedures (MILSTRAP).

11The DLMS is a system governing logistics functional business management standards and practices rather than an automated information system.

training. That regulation is DoD 7000.14-R, Department of Defense Financial Management Regulations. It establishes financial management requirements, systems, and functions for all appropriated, non-appropriated, working capital, revolving, and trust fund activities. In addition, it directs statutory and regulatory financial reporting requirements.

1.5.6. Asset Visibility

Asset visibility is the cross-cutting capability that provides Combatant Commanders, the Military Services, and the Defense Agencies with timely and accurate information on the location, movement, status, and identity of equipment and supplies12.

1.6. PROCESSES, ACTIVITIES AND ACTIONS

Item management involves many functional processes, activities, and actions. These elements are integrated and flow smoothly so that the needs of warfighters for items are satisfied when and where they occur. The functional processes, activities, and actions impacting item management are arrayed in Table 1 in summary format to show how they are related and interdependent.

Functional Processes

Activities Actions

Develop Requirements Identify needs

Identify suitable marking methods and procedures

Design Engineering

Materiel Management

Cataloging

Assign part number

Request part number

Assign stock number

Assign UII

Produce & Accept Process Control Apply & inspect item marking

Transport Transportation Track items

Stock Stocking Stock, locate and retrieve items

Control item inventory

12 DoDI 5158.06, Distribution Process Owner (DPO), establishes the DoD policy to achieve effectiveness, efficiency, and alignment of DoD-wide distribution activities, including force projection, sustainment, and redeployment/retrograde operations. The DPO is the lead functional proponent for Radio Frequency Identification and related Automatic Identification Technology (AIT) implementation in the DoD supply chain, developing a centralized approach for the use of asset visibility technologies.

Order Requisitioning Request supply item

Supply Shipping Locate and ship items

Use Receipt Receive, install and use items

Maintain Preventive Maintenance Clean, inspect, and service items

Repair Maintenance Restore reparable items

Rebuild Overhaul Refurbish items

Maintain original UII through process

Decommission Demilitarization Remove ownership markings, leave the unique identification data elements

Dispose Disposal Sell/recycle scrap

Destruction and/or abandonment

Pay Financial Accounting Settle invoices

Account Inventory

Financial Statements

Manage & control

Property valuation

Table 1. Functional Processes Impacting Item Management

2. The Need to Uniquely Identify Items

2.1. DIFFERENTIATING ITEMS THROUGHOUT THE

SUPPLY CHAIN

The Department uniquely identifies the items to which it takes title to provide sufficient asset accountability, valuation and life cycle management. Unique identification provides the Department the opportunity to differentiate an individual item from all others. Unique identification of items provides the Department with the information architecture to facilitate accomplishment of the following:

• Improve the acquisition of equipment and performance based logistics services for the warfighter,

• Capture timely, accurate and reliable data on items (i.e., equipment, reparables, materials, and consumables),

• Improve life cycle asset management, and

• Track items in the Department and industry systems for operational, logistical13, and financial accountability purposes.

2.2. ACCOUNTING FOR ACQUIRED ITEMS

Accountability of items begins when hardware (equipment and reparables) and supplies (materials and consumables) are acquired through purchase, lease, or other means, including transfer or fabrication, whether the hardware and supplies are already in existence or yet to be created, developed, demonstrated, and evaluated14. DoDI 5000.64 requires that accountable property records shall be established in an accountable property system of record for all Government property purchased, or otherwise obtained, having a unit acquisition cost of $5,000 or more; property of any value that is controlled or managed at the item level; leased items (capital leases) of any value; and assets that are sensitive or classified15. Property accountability records and systems shall contain the data elements specified in DoDI 5000.64, Enclosure 3, paragraph 6.0, including part number, cost16, national stock number, UII or DoD recognized IUID equivalent, and other data elements listed17.

For items covered under DoDI 4140.01, all materiel recurrently used, bought, stocked, or distributed is cataloged with an accountable record18.

13 DoDM 4140.01, Volume 9, February 10, 2014 addresses IUID policy for logistics.

14 See American Society for Testing and Materials Standard E-2135-02, Standard Terminology for Property and Asset Management.

15 DoDI 5000.64, May 19, 2011, op. cit., Enclosure 3, paragraph 2.a.

16 Value at full cost and depreciation information, if applicable; or original acquisition cost if the property does not require capitalization 17 Ibid., Enclosure 3, paragraph 6.0, specifies the minimum data elements required.

18 See paragraph 4.c.

The Need to Uniquely Identify Items

2.3. CONTRACTOR-ACQUIRED PROPERTY ON COST-

REIMBURSEMENT TYPE CONTRACTS

Title to property whose cost is reimbursable to the contractor passes to and vests in the Government upon: (1) delivery to the contractor of an item purchased by the contractor and reimbursed as a direct cost under the contract, (2) issuance of the property for use in contract performance; (3) commencement of processing of the property or use in contract performance; or (4) reimbursement of the cost of the property by the Government, whichever occurs first. The Government acquires title to all property purchased or fabricated by the contractor in support of contract performance and may take title to Special Tooling in accordance with the contract clauses. However, if such items are to be delivered to the Government, they shall be delivered under a contract line item or subline item19. Unless required otherwise in the contract, such property shall be marked with an IUID Data Matrix only upon its delivery to the Government, provided that it meets the IUID marking criteria.

2.4. ESTABLISHING ITEM ACQUISITION COST

It is essential that contracts contain specific arrangements to capture the acquisition cost of all delivered items because the acquisition cost shall form the basis for the entries made in the Department’s financial statements and shall determine the degree to which those statements comply with the requirements of the Federal Accounting Standards Advisory Board. Ideally, acquisition cost for items would be recorded at the time these items are delivered to and accepted by the Government.

2.4.1. Using Contract Line Items

All property delivered to the Government shall be delivered on a Contract Line Item Number (CLIN) or Sub Line Item Number (SLIN). The acquisition cost of each item entering the Government property inventory is captured on the CLIN or SLIN.

CLINs and SLINs are established when the contract is structured prior to award and shall be included for all items for which the Government shall take delivery, either during the performance or at the completion of the contract. The estimated acquisition cost of property shall be identified upon delivery.

Table 2 shows the acquisition cost of items delivered under contracts that are separately priced under CLINs or SLINs. Informational subline items are used to capture the acquisition cost for items to be delivered when separately priced CLINs or SLINs are not practicable. Informational SLINs used only for identification of acquisition cost have to be clearly marked as such so they are not confused with delivery, acceptance, and payment requirements of the contract. When the acquisition costs for like items differ, separate informational SLINs are used to identify the acquisition cost for each of the items with a different acquisition cost.

19 For additional information, see DFARS Procedures, Guidance and Instructions 245.401-70 Contractor-acquired property.

Deliverable UII or IUID

Equivalent Required Unit Acquisition Cost (or price) Required

Valuation Method (Contract type)

CLIN/SLIN items requiring UII or IUID equivalent (includes items delivered separately as spares).

Yes. All items valued over $5K/unit value.

Use DoD decision tree20 to determine requirements under $5K per unit value.

Yes Fixed Price- use CLIN/SLIN values.

Cost Type-use contractor estimated costs. DoD shall address delta $ from final total price.

Sub items requiring UII or IUID equivalent contained within

CLIN/SLIN

delivered items.

(LRU/Spares)

Yes. Application of maintenance plan (e.g.

lowest repairable or replaceable unit by DoD); No dollar threshold for applicability21.

No N/A

Other commercially marked items not requiring IUID.

(CLIN/SLIN)

No. The DoD shall accept existing commercial markings.

Yes – All delivered items shall be valued per unit.

Fixed Price- use CLIN/SLIN values Cost Type-use contractor estimated costs. DoD shall address delta $ from final total price.

Table 2. Contract Requirements – Identifying Unit Acquisition Cost

To comply with IUID policy that UIIs be delivered on a CLIN/SLIN, the Contracting Officer shall modify a contract to establish separate CLINs/SLINs prior to delivery of items that were not identified as contract deliverables at the time of contract award.

2.4.2. Valuation of Items

Both the unique identification and the value of items that shall be delivered under the contract need to be reflected in the Department’s property accountability and management information systems. According to DoDI 5000.64, acquisition cost shall be the basis for valuation of property.

For fixed price contracts, the acquisition cost for items to be delivered is the fixed price paid by the Government.

20 The decision tree for new acquisition items is found in Figure 1.

21DFARS 252.211–7003 requires a contract attachment to list embedded DoD serially managed subassemblies, components, and parts that are to be uniquely identified. The IUID data are reported at the time of delivery, either as part of, or associated with the Material Inspection and Receiving Report.

For cost type contracts, the acquisition cost for items to be delivered is the Contractor’s estimated cost at the time the item is delivered. The acquisition cost of components within delivered items need not be identified.

A delivered item may be composed of embedded items, such as subassemblies, components, and parts. The prime contractor shall pass down appropriate specifications and contract requirements, including the IUID marking requirements where applicable, to the tiered vendors for subcontracted subassemblies, components, and parts.

Spares may be purchased directly from the vendor(s) or through the prime. IUID-qualifying spare items (subassemblies, components, and parts) have to be marked appropriately with an IUID Data Matrix.

When the prime delivers the complete item that is one UII. The spares are delivered with their own UIIs. The prime is responsible for ensuring the IUID Data Matrix marking and registering of the UII for those DoD serially managed embedded items and their parent items in the delivered complete item.

3. Requirements for IUID

3.1. WHAT IS AN ITEM?

As stated earlier in this guide, an item is a single hardware article or a unit formed by a grouping of subassemblies, components, or constituent parts22. In this definition, hardware is a generic term dealing with physical items (as distinguished from a capability or function) such as equipment, tools, implements, instruments, devices, sets, kits, outfits, fittings, trimmings, assemblies, subassemblies, components, and parts23.

3.2. DECIDING WHAT ITEMS ARE TO BE IDENTIFIED AS

UNIQUE

3.2.1. Items Delivered Under Contracts

IUID is driven by an integrated set of logistics, acquisition, and financial requirements to identify and track item information. The criteria in the decision tree apply when the items are delivered under contract. Items being delivered under contract, including new equipment, major modifications, reprocurements of equipment and spares, shall include the contract clause Defense Federal Acquisition Regulation Supplement (DFARS) 252.211-7003 to invoke the IUID requirement24.

All items delivered to the Government under contract require item unique identification, or a DoD recognized IUID equivalent, if one or more of the following criteria25 apply (each discussed separately):

(1) All items for which the Government’s unit acquisition cost is $5,000 or more;

(2) Items for which the Government’s unit acquisition cost is less than $5,000 when the requiring activity26 determines that item unique identification is required for mission essential or controlled inventory items;

(3) Regardless of value for any—

(a) DoD serially managed item (reparable or nonreparable) or subassembly, component, or part embedded within a subassembly, component, or part;

(b) Parent item (as defined in 252.211-7003(a)) that contains the embedded subassembly, component, or part;

22 DFARS 252.211-7003(a).

23 Joint Publication 1-02, DoD Dictionary.

24 DoDI 8320.04, paragraph 5.4.1, permits alternative implementation provided that the acquired items are marked and registered no later than 30 days after receipt.

25 These criteria are codified in DFARS 211.274-2, current edition.

26 The requiring activity will make this determination and list the items in the DFARS 252.211-7003 contract clause. For legacy items, the requiring activity will make this determination in order to identify principal items in inventory or use for item unique identification.

Requirements for IUID

(c) Warranted serialized item;

(d) Item of special tooling or special test equipment, as defined at FAR 2.101, for a major defense acquisition program that is designated for preservation and storage in accordance with the requirements of section 815 of the National Defense Authorization Act for Fiscal Year 2009 (Pub. L. 110-417); and

(e) High risk item identified by the requiring activity as vulnerable to supply chain threat, a target of cyber threats, or counterfeiting.

Figure 1. Uniquely Identifying Items Delivered Under Contract

3.2.2. Legacy Items

The criteria in the Figure 2 decision tree apply to existing legacy principal end items27 and secondary items28 in inventory, in use, or undergoing maintenance, repair, or

27 Principal items are end items and replacement assemblies of such importance that management techniques require centralized individual item management throughout the supply system, to include depot level, base level, and items in the hands of using units. These specifically include the items where, in the judgment of the Services, there is a need for central inventory control, including centralized computation of requirements, central procurement, central direction of distribution, and central knowledge and control of all assets owned by the Services. (Joint Publication 1-02) 28 Secondary items are items that are not defined as principal items and include reparable components, subsystems, and assemblies, consumable repair parts, bulk items and material, subsistence, and expendable end items, including clothing and other personal gear. (DoDM 4140.01, Volume 3) overhaul. IUID marking for legacy secondary items, which are subject to the materiel management policies of DoDM 4140.01, Volumes 1 through 11, only apply when such items are:

(a) DoD serially managed items that are also – at the same time – categorized as sensitive, critical safety, or pilferable items;

(b) Reparable items;

(c) Non-reparable items that the requiring activity decides require item level traceability at any point in their life cycle.

Figure 2. Uniquely Identifying Legacy Items in Inventory or Use

Program and item managers shall prepare implementation plans for implementation of IUID on legacy items in operational use, including items undergoing maintenance, repair or overhaul, and in inventory. Only those legacy items determined in these implementation plans to meet the IUID criteria specified in Figure 2 shall require an IUID Data Matrix.

3.2.3. Context and Scope of Decision Criteria

3.2.3.1. DoD Serially Managed

A distinction is made between “serialized items” and “DoD serially managed” items.

While DoD may use an item that has been serialized by the manufacturer, DoD may not manage the item by means of its serial number. When DoD elects to manage an item by its serial number it becomes "DoD serially managed".29 This means it is a tangible item used by DoD, which is designated by a DoD or Service Item Manager to be uniquely tracked, controlled or managed in maintenance, repair and/or supply by means of its serial number30.

DoD serially managed items require UIIs. Serial numbers may be unique within a product or organization, but UIIs are globally unique. This permits an item to be uniquely distinguishable in different databases.

A broad variety of items fall into the DoD serially managed category through programs for serial number tracking, serialized item management, and unique item tracking.

Examples of DoD serially managed items may include reparable items down to and including sub-component reparable unit level; life-limited, time-controlled, or items requiring records (e.g., logbooks, aeronautical equipment service records); and items that require technical directive tracking at the part level31.

Embedded items include subassemblies, components, or parts that are integral to the item being delivered. All items that are serially managed by DoD require IUID. These items shall be listed in the contract in order to clearly indicate which items are to be marked.

This criterion is applied without regard to the value of the embedded item.

Each uniquely identified embedded item is contained within a higher assembly known as its parent item32. The parent item shall be chosen at any appropriate level of configuration above the level of the embedded item provided that the parent item is a higher assembly, intermediate component, or subassembly The parent item of a DoD serially managed embedded item is also required to have a UII. This criterion is applied without regard to the value of the parent item.

29 This would include high risk items that are vulnerable to supply chain threat, a target of cyber threats, or counterfeiting.

30 A serial number is an assigned combination of numbers and/or letters to an item instance that separately identifies that item instance from all others within a product or organization.

31 DoDI 4151.19, January 9, 2014, Serialized Item Management (SIM) for Life-Cycle Management of Materiel 32 Parent item means the item assembly, intermediate component, or subassembly that has an embedded item with a unique item identifier or DoD recognized IUID equivalent.

3.2.3.2. $5,000 Unit Acquisition Threshold This IUID criterion establishes the $5,000 value as the unit acquisition cost threshold for IUID. All items at this threshold or above are required to have item unique identification in accordance with the threshold requirement for establishing property records. Although DoDI 5000.64 does not require items under $5,000 to have property records unless they are leased assets of any value, or items that are classified or sensitive, a program manager shall examine the other IUID criteria to determine if items below the $5,000 threshold require item unique identification.

3.2.3.3. Mission Essential Items

Item essentiality is a measure of an item's military worth in terms of how its failure would affect the ability of a weapon system, end item, or organization to perform its intended functions. Military mission essentiality is the composite effect of an item on the overall military mission based on the most critical significant application of the item33.

The primary use of military mission essentiality is in supply chain management for determining resource allocations, determining degree of management intensity, and communicating essentiality among the DoD Components. An assessment of mission essentiality shall include item essentiality and the degree to which it impacts on the overall military mission. The requiring activity shall determine on a case-by-case basis that IUID is required for the traceability of mission critical items.

Some secondary legacy mission essential items are exempt from IUID requirements, see section 3.3.2 for more information.

3.2.3.4. Controlled Inventory Items

The DoD employs item accountability, control, and stewardship procedures to ensure that assets are protected against waste, loss, negligence, unauthorized use, misappropriation, and compromise34. Controlled inventory items are those items designated as having characteristics that require they be identified, accounted for, segregated, or handled in a special manner to ensure their safeguard and integrity. They include classified items (require protection in the interest of national security); sensitive items (require a high degree of protection and control due to statutory requirements or regulations, such as precious metals; items of high value, highly technical, or hazardous nature; and small arms); pilferable items (items having a ready resale value or application to personal possession, which are especially subject to theft)35; and safety controlled items. The requiring activity shall determine on a case-by-case basis that IUID is required for the traceability of controlled inventory items.

Some secondary legacy controlled inventory items are exempt from IUID requirements;

see section 3.3.2 for more information.

33 DoDM 4140.01 34 DoDM 4140.01 35 DoD 4100.39-M, Volume 10, Table 61

3.2.3.5. Warranted Serialized Items

Any warranted serialized item identified pursuant to DFARS 252.246-7006, Warranty Tracking of Serialized Items, shall be marked with an IUID Data Matrix. The UII enables the ability to trace a warranted item from delivery through completion of the requirements of the warranty.

3.2.3.6. Special Tooling for Major Defense Acquisition Programs Section 815 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (Pub. L. 110-417) requires the Department to plan for the preservation and storage of unique tooling associated with the production of hardware for major defense acquisition programs through the end of the service life of the related weapons system36.

Unique tooling is one-of-a-kind tooling without which the item could not be produced.

For DoD purposes, the term “unique tooling” is appropriately defined by the well-known term “special tooling”, as defined in FAR 2.101(b).

The USD(AT&L) policy memorandum, dated August 3, 200937, provided guidance for the implementation of the statute. The provisions in this memorandum are: (a) special tooling retention shall continue to be reviewed during the life of the program, (b) special tooling designated for preservation and storage shall be serially managed and uniquely identified as directed in DoDI 8320.04, Item Unique Identification (IUID) Standards for Tangible Personal Property, and (c) special tooling shall be refurbished if it has reached the end of its service life prior to its preservation and storage, as required.

3.2.3.7. High Risk Items

The requiring activity has the responsibility to identify high risk items that are vulnerable to supply chain threat, a target of cyber threats, or counterfeiting. These high risk items shall be marked with an IUID Data Matrix to enable item level life cycle traceability38 throughout the DoD supply chain.

3.3. SPECIAL TOPICS

3.3.1. IUID of Sets, Kits, and Outfits

Sets, kits, and outfits (SKO) are assemblages of components, support items, or mission specific and common tools in a container (for example, a bag, pouch, box, chest, van, trailer, or shelter) that are used in association. SKOs are primarily designed to accomplish a specific mission or maintenance function. They are identified, cataloged, 36 This requirement is codified in DFARS 207.106 (S-73).

37 USD(AT&L) Memorandum, dated August 3, 2009, Subject: Preservation and Storage of Tooling for Major Defense Acquisition Programs.

38 Item level traceability is the requirement to trace life cycle management to an individual item for specified events related to acquisition, validation of authenticity, property accountability, storage, operation, maintenance, safety, physical security, retirement, and disposal by a single instance of an item, e.g., an item marked with a UII.

authorized, and issued as a single unit. They may be made up of components, support items, and tools included in more than one class of supply; may include end items; may include components, support items, and tools for which logistic responsibilities are assigned to more than one agency; and may include nonexpendable, durable, and expendable components, support items, and tools. The SKO is an item of supply, configuration controlled by a part number or line identification number.

For purposes of both property accountability and materiel management of secondary items, a SKO shall have a UII if it meets the qualifying criteria for tracking and valuation purposes as long as it resides in the inventory. If any of the components of the SKO are DoD serially managed items, they would be uniquely identified separately as embedded items in the parent item. In this case the parent item is the SKO of which the DoD serially managed components are a part. The embedded item would not be separately valued, since the value of the embedded item is capitalized in the value of the SKO.

An SKO could be a set of components for a single assembly part, packaged together as a single part number, for inclusion into one assembly during a maintenance function or configuration change. This type of SKO is most often referred to as a kit. Once the kit is applied to an assembly, the kit is “consumed” and capitalized as part of the value of the assembly in which it is installed; and the UII for the kit would be retired. The assembly in which the kit is installed would become the new parent item for any embedded items from the kit.

3.3.2. Legacy Items Not Requiring IUID Marking and

Registration

Secondary legacy items which are not DoD serially managed and for which property accountability records are met by determining the quantity on hand are not required to be marked with an IUID Data Matrix and registered unless the item manager has required they be marked and registered39. Included in this exclusion are items such as threaded fasteners designated as critical safety items, but managed only by quantity, National Stock Number (NSN), or part number. Examples of such items by classes of supply are listed in Table 3.

39 OUSD(AT&L) Policy Memorandum “Policy Refinement for Secondary Items in Use or in Inventory” dated 30 December 2010.

I. Accountability/traceability required by quantity by case, weight, or volume – do not mark and register

• Class I – Subsistence

• Class II – Clothing, expendable individual equipment, consumable administrative and housekeeping supplies

• Class III – Bulk fuels, chemicals, and coal

• Class IV – Fortification and barrier materials

• Class VIII – Consumable medical supplies

II. Accountability/traceability required by quantity by each, unit of issue, or by case – do not mark and register

• Class II – Non-expendable individual equipment and sets, kits, and outfits that are not DoD serially managed

• Class III – Packaged petroleum products

• Class V – Ammunition items that are not DoD serially managed

• Class IX – Consumable repair parts and components that are not DoD serially managed Table 3. Legacy Items Exempt from Marking and Registering

4. Determining Uniqueness of Items

4.1. WHAT IS THE UII?

The UII is a string of capital letters, digits, dashes and/or forward slashes, not longer than 50 characters in length. The UII is a globally unique and unambiguous identifier that distinguishes an item from all other like and unlike items.

4.1.1. Defining the Data Elements for the UII

There is more than one way to achieve a globally unique, unambiguous string of characters suitable for a UII.

(a) The DoD recognizes six established identifiers sufficient to be used as UIIs as they are: Global Individual Asset Identifier (GIAI); Global Returnable Asset Identifier (GRAI)40; Vehicle Identification Number (VIN); Electronic Serial Number (ESN), Mobile Equipment Identifier (MEID), or Cellular Mobile Telephone Identifier (CMTI) (for cell phones); each is discussed in section 4.1.2.

(b) Construct a UII by combining other identifiers (e.g., part number, serial number, CAGE code). The collection of identifiers, which when combined produces a UII, are referred to as the “UII data set”. There are two general ways to construct a

UII.

1) Construct #1 is made from the following UII data set in this order: issuing agency code (IAC) (see below), enterprise identifier (see below), and serial number. Construct #1 can only be used if the serial numbers are unique throughout the enterprise.

2) Construct #2 is made from the following UII data set in this order: IAC, enterprise identifier, original part number, and serial number. Construct #2 can only be used if the serial numbers are unique within the original part number and the original part numbers are unique throughout the enterprise. (The original part number may be replaced in the above description with either lot number or batch number, and be equally valid within IUID policy.)

4.1.2. DoD Recognized IUID Equivalents

Generally, a commercial…