CLIN Funding

That's a very difficult question to answer, and the answer is very complicated, because people use line items (CLINs) in so many different ways and on different types of contracts. I'll try to explain in as simple a way as possible. If I forget something I'm sure that someone else will come in to correct me.

Assuming that a line item specifies what some call "a deliverable," then the amount on the line item is either the item price, the item estimated cost (and fee) under a fully funded cost-reimbursement contract, or the amount presently allotted to the item under an incrementally funded cost-reimbursement or fixed-price contract.

Under a fixed-price contract, the line item dollar amount should be the price for the item. You cannot move funds one line item to another without first reducing the price of one item and then increasing the price of the other by a commensurate amount. If you do that, then you can move the funds, but only if both line items are funded with the same type of appropriation and both are bona fide needs of the same appropriation period.

The same is generally true of a fully funded cost-reimbursement contract. You cannot move the funds unless you negotiate a change to the estimated amounts for the line items, either due to increases and decreases due to changes or to underruns and overruns, and unless the funds are of the same type and the items are for the same appropriation period.

Technically, "moving" funds from one line item to another would entail deobligating them and then reobligating them.

In addition to the factors that Vern has identified other issues that need to be considered are whether the contract is funded at the CLIN level or a whole contract level and whether the contract requires billing at the CLIN level or whole contract level. I have seen situations where a cost reimbursement contract is funded at the whole contract level with no requirement for billing by CLIN, but the contracting officer would not permit billing in excess of the estimated cost for a CLIN, but other contracting officers would permit such billing practices.

One of our problems is that there is no governmentwide rule about establishing CLINs, and automated contract writing systems have rendered some agency rules obsolete. DOD has the best rule, in DFARS 204.7103.

A governmentwide rule is on the way. FAR Case 2013-014 was established to create a Federal standard for line item numbering. The FAR case status report says they are reviewing the draft proposed rule.

Now if only they will develop a uniform way of numbering contracts or identifying the contract type.