4.1003 Establishing line items
Source: FAR 4.1003 on acquisition.gov
Establish separate contract line items for each deliverable that is uniquely identifiable, priced, and classified, ensuring clear tracking and compliance.
Overview
FAR 4.1003 outlines the requirements for establishing separate contract line items for deliverables in government contracts. The section ensures that each deliverable is clearly defined, priced, and tracked for effective contract management and compliance. The rule applies unless exceptions in FAR 4.1005-2 are met.
Key Rules
- Separately Identifiable Deliverables
- Supplies must have unique identifiers (e.g., NSN, part number); services must have a single statement of work. First articles requiring separate approval must have their own line items.
- Single Unit or Total Price
- Each line item must have a distinct price or total price.
- Single Accounting Classification
- Each line item should have one accounting classification, unless the deliverable cannot be subdivided.
- Distinct Delivery or Performance Terms
- Line items must reflect unique delivery schedules, destinations, or periods/places of performance.
- Single Pricing Type
- Each line item must use a single contract pricing type (e.g., fixed-price, cost-reimbursement).
Responsibilities
- Contracting Officers: Must structure contracts to include separate line items per these criteria and ensure compliance with exceptions in 4.1005-2.
- Contractors: Must understand and comply with line item structure for deliverables, pricing, and invoicing.
- Agencies: Oversee contract formation and ensure proper line item establishment for accountability and audit purposes.
Practical Implications
- This section ensures clarity in contract deliverables, pricing, and funding, reducing ambiguity and facilitating contract administration. Failure to properly establish line items can lead to payment delays, funding issues, or audit findings.
Establish separate line items for deliverables that have the following characteristics except as provided at 4.1005-2:
(a) Separately identifiable.
(1) A supply is separately identifiable if it has its own identification (e.g., national stock number (NSN), item description, manufacturer's part number).
(2) Services are separately identifiable if they have no more than one statement of work or performance work statement.
(3) If the procurement instrument involves a first article (see subpart 9.3), establish a separate line item for each item requiring a separate approval. If the first article consists of a lot composed of a mixture of items that will be approved as a single lot, a single line item may be used.
(b) Single unit price or total price.
(c) Single accounting classification citation. A single deliverable may be funded by multiple accounting classifications when the deliverable effort cannot be otherwise subdivided.
(d) Separate delivery schedule, destination, period of performance, or place of performance.
(e) Single contract pricing type (e.g., fixed-price or cost-reimbursement).