Line level review of a case

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1. Every amendment is also an audit

A case can run for years and be amended many times. Each amendment is a chance to correct what earlier versions got wrong, and the manual treats that as an obligation. "Due diligence should be employed by the IAs in reviewing cases, lines, and finances on a continuous basis to ensure correctness and limit the return of cases" (SAMM C9.4.9.1).

The rules divide every line into two classes, and the division is not about money. It is whether the line is part of the amendment being processed. Those affected are touched lines; the rest are untouched, and the same error is handled differently in each. Amendments generally are covered in amendments and modifications.

2. Touched lines are brought fully up to date

For a line inside the amendment, the pricing is rebuilt rather than checked. It must carry the correct category code structure and the correct indirect components, listed as recoupment charges, contract administration services, the administrative surcharge and transportation (SAMM C9.4.9.1.1.1).

Coding is corrected even where the money is right. The apply and waive codes must be updated for each component even if the price is correct, since the component exists to carry the right estimate for that surcharge (SAMM C9.4.9.1.1.2). Several codings are acceptable when the result is nothing: "Pricing codes of AP-0%, WC, or Not Applicable (NA) are all acceptable pricing coding for IPCs when the net result is $0" (SAMM C9.4.9.1.1.2).

Overriding a figure is allowed but not silent. Where an override of cost or percentage is necessary, "a justification must be entered for each IPC in the Line Price Estimation Screen" (SAMM C9.4.9.1.1.2).

3. A charge that stopped in 2007

One component has a historical cut off, and the instruction is unusually specific. For the logistics support charge, "the line should be reviewed by the IA to determine what deliveries have already been made with shipment dates prior to 1 October 2007" (SAMM C9.4.9.1.1.1.1). The charge is recalculated against those deliveries alone.

Updating the values is otherwise discretionary, and then becomes mandatory on two triggers. Where the purchaser has asked for funds to be reallocated within the case, or has asked that the charge be reduced to reflect actual charges, "the IA must adjust LSC pricing as appropriate" (SAMM C9.4.9.1.1.1.2).

4. Codes that have to agree with each other

Much of the section is about internal consistency: the source of supply on a line has to match how the price is coded. "The Price Element (PE) code assigned to a PCC must be appropriate to the SoS of the line, or portion of the line" (SAMM C9.4.9.1.3.1).

The named common error has consequences. A stock line coded as contract cost is wrong, because that code signals termination liability in the payment schedule, which belongs only to procurement lines and mixed ones (SAMM C9.4.9.1.3.1). That liability is covered in terms of sale and the dependable undertaking.

Mixed lines cannot be priced as one thing. Such a line "must reflect a minimum of two PCCs, one for stock and one for procurement, with the CAS appropriately applied to the procurement PCC" (SAMM C9.4.9.1.3.2).

Where a materiel line has people inside it, one category code is used if the manpower cannot be separated from the materiel cost, and two if it can. Splitting it invites one specific error, because the manpower figure is already fully burdened: "IAs must override fringe benefits or Unfunded Retirement IPCs to zero" (SAMM C9.4.9.1.3.3).

Transportation follows the same discipline. Where the government carries domestic transportation, the distribution screen "should be set to 100% for DTC 2 and 0% for DTC 7 to ensure DTC 2 is assessed below the line" (SAMM C9.4.9.1.5), a coding explained in delivery term codes and freight forwarders.

5. Untouched lines, and the return that does not happen

An error on a line outside the amendment still has to be fixed while the amendment is written. If the value included in the case is wrong, "the incorrectly priced line item must be added to the amendment or modification and the pricing fixed" (SAMM C9.4.9.1.2.1). The example given is recoupment or administration costs that should have been applied and were not.

Once the document has left the drafting agency, the treatment changes. "an LOA document should not be returned to the IA when it is determined there is an incorrect pricing/pricing component(s) on untouched case lines during the review process" (SAMM C9.4.9.1.2.1.1), unless the case is being prepared for closure, where the correction has to be made on the document in process.

Instead the error is logged for next time. Reviewers record the line and the action required on the next iteration, approve the document with comment, and two milestones track what the manual calls future correction required events (SAMM C9.4.9.1.2.1.1). A case level report shows whether corrections are outstanding.

6. Lines nobody can price any more

Some cases predate the current case management system, their lines carried across at conversion. Working out the original add on percentages can be impractical, so the agency notes in the case remarks that detailed breakouts are not available without excessive expenditure of resources (SAMM C9.4.9.1.4).

The concession has a date. "lines which were added to those pre-DSAMS cases on/after 1 October 2001, must be in compliance with applicable pricing rules" (SAMM C9.4.9.1.4), and two named reports establish which lines those are.

And the concession is conditional on saying something. A case will not be returned simply because the breakouts cannot be produced, but "If there are no comments provided to indicate what the general pricing contained, then the case will be returned to the IA" (SAMM C9.4.9.1.4). Silence is the failure, not the missing data.

7. Money as well as price

Running alongside the pricing review is a second one, on whether the case is financially sound. "The Case Validation is a useful tool to identify when a line is being/has been reduced below the level of obligations, commitments, deliveries, and billings being reported by the IA financial systems" (SAMM C9.4.9.2).

Where a document is urgent, a full reconciliation may not be feasible, and the answer is a documented promise. The agency records the out of balance position in a remark, states when it will be corrected, and undertakes to cover the cost if that passes (SAMM C9.4.9.2).

That tolerance has a limit. Where not covering the imbalance would produce an unacceptable cash balance for the customer or another serious financial condition, the document is returned unless the case remarks adequately address it (SAMM C9.4.9.2). The section closes by keeping the two reviews apart: "Nothing in this paragraph should be interpreted to alter the requirements to apply appropriate pricing as discussed otherwise in the SAMM or other pricing memos" (SAMM C9.4.9.2).

8. What a supplier can take from this

The state of a long running case is not settled. Known pricing errors can sit on it for years, flagged for correction on the next amendment, which means an amendment may arrive carrying adjustments that have nothing to do with the change being requested.

Two things are worth watching. Touched lines are repriced in full, so a line reopened for a small change may return carrying recoupment or administration charges it did not have before. And where a support charge is reduced to free money, the funds paying for added scope may already be on the case.

Key terms

Touched line	An implemented line affected by the amendment, repriced in full.
Untouched line	An implemented line outside the amendment, where an error is logged rather than returned.
Logistics support charge	A charge recalculated only against deliveries shipped before 1 October 2007.
Future correction required	The milestone recording a known pricing error to be fixed on the next amendment.

Every statement above links to the document behind it. The full source list for this piece is on the sources page.

This page describes public United States government programs for general information. It is not legal, regulatory or procurement advice, and it does not address the facts of any particular case.

How Sentfore supports this

An amendment that reprices a line can change the money available for delivery. Sentfore supports defense programs at the delivery end, providing secure transport, protective security, accommodation and site support in complex environments. Requirements can be sent through the contact page.