“SMALLTOFEDS” By Ken Larson
“Contract Line Items (CLINs) specify products or services being procured and the negotiated prices for them.
Carefully review (CLIN) relationships to other critical elements of your contract for consistency before proposing, accepting and signing your deal. Contract line items are critical for reporting and billing purposes in your accounting system.”
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“Invoices to the government for supplies or services delivered must reference the associated CLIN.
For service contracts that are cost-based such as Time and Materials (T&M) or Cost Plus and for progress billings under fixed price contracts, your job cost accounting system must be able to track labor, material and other direct costs at the CLIN level or below to provide auditable details for payment approval.
Government requisition and appropriation data against the CLIN are carried throughout the government finance and accounting system that makes payment on your invoices. CLIN’s form the backbone upon which all the other contract sections are built. If the CLIN structure is defective, it is likely many other areas of the contract will also be deficient.
During the “Sources-Sought”, “Pre-solicitation” or “Draft RFP” stages of a procurement the government often invites industry to comment on the evolving solicitation. The CLIN structure should be evaluated in relation to such items as the Work Breakdown Structure (WBS), the Statement of Work (SOW) and the contract schedule from the perspective of visualizing the work underway, tracking and reporting the status and finances of deliverables, inspection and acceptance and accurately billing the deliveries on invoices.
If the agency is establishing a poorly integrated CLIN structure you should comment appropriately to the contracting officer, suggesting corrections and additions to establish a framework against which your enterprise can estimate effectively, operate efficiently, report accurately and bill without experiencing delays. Most agency contracting shops appreciate such contributions.”
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