PGI 204.202-71: Establishing line items, subline items, and exhibit line items.

(a) Line Items.

(1) When structuring line items, consider the following:

(i) The effect of the chosen units of measure on administration and payment, especially on fixed-price contracts.

(ii) The need for periodic deliveries and payments when selecting a unit of measure as it may impact the contractor’s cashflow during contract performance.

(iii) The impact of any financing arrangements under FAR part 32 and whether there is a need to consider cashflow for progress payments.

(2) Minimum requirements.

(i) Supply line items:

(A) Contracting officers must match the quantity to the actual number of the supplies to be provided. If more than one delivery is expected, the quantity cannot be “1”.

(B) Describe the item or supply being procured in sufficient specificity and detail to be identified by a third party in order to—

(1) Submit a bid, quote, or offer;

(2) Receive the item or supply;

(3) Inspect the item or supply;

(4) Pay for it; and

(5) Inventory if applicable

(C) Use manufacturer part numbers or similar identifiers when available.

(i) Service line items:

(A) Contracting officers must match the quantities with the frequency with which performance will be reviewed, and on fixed-price line items, payment made. If the quantity used is 1, then the contract only allows for 1 payment, 1 time, for that 1 delivery when performance is completed. In contrast, if performance will be reviewed, accepted, and paid on a monthly basis, the quantity should reflect the number of months in the period of performance. For example, a 12-month effort should reflect a quantity of 12, a unit of measure of months or lots and the amount which will be paid each month.

(B) Describe the services being procured and accepted in a manner that traces the requirements of the performance work statement (PWS), statement of work (SOW), or statement of objectives (SOO) to the line item structure so that a third party can—

(1) Submit a bid, quote or offer;

(2) Observe and inspect performance;

(3) Accept performance; and

(4) Pay for the services

(3) Add any performance incentives or award fees to the same deliverable line item on which the performance occurs.

(4) Single accounting classification citation. Establish informational subline items for each accounting classification citation when the use of multiple accounting classification citations is necessary for a single deliverable.

(5) The line item number must be the same as the solicitation line item number unless there is a valid reason for using different numbers.

(b) Subline items.

(1) Deliverable subline items. Subline items will be used instead of line items to facilitate payment, delivery tracking, contract funds accounting, or other management purposes. Such subline items must be used when items bought under one line item number—

(i) Are to be paid for from more than one accounting classification. A subline item must be established for the quantity associated with the single accounting classification citation. Establish a line item rather than a subline item if it is likely that a subline item may be assigned additional accounting classification citations at a later date. Identify the funding as required at PGI 204.202-71(a)(4));

(ii) Are to be packaged in different sizes, each represented by its own NSN;

(iii) Have collateral costs, such as packaging costs, but those costs are not a part of the unit price of the line item;

(iv) Have different delivery dates or destinations or requisitions, or a combination of the three; or

(v) Identify parts of an assembly or kit which—

(A) Have to be separately identified at the time of shipment or performance; and

(B) Are separately priced.

(2) Informational subline items.

(i) Informational subline items must be used to identify each accounting classification citation assigned to a single line item number when use of multiple citations is authorized (see PGI 204.202-71(a)(4)).

(ii) Contracting officers must not provide pricing arrangement, delivery, inspection, or acceptance information on informational subline items.

(c) Exhibit line items.

(1) A line item or subline item may refer to an exhibit or multiple exhibits. However, each exhibit may only be associated with one line item or subline item. An exhibit may contain one or more exhibit line items.

(2) Exhibit line items are separately identifiable and require the elements at FAR 4.202-4.

(3) All line items sharing the same exhibit must be the same contract type.