1. Contracting Officer Podcast Slides
Knowledge & Insights From Contracting Officers

2. Episode 070 Original Air Date: 23 March 2016
What is an ACRN
Original Air Date: 23 March 2016
Hosts: Kevin Jans & Paul Schauer

3. Formatting notes
Hyperlinks: Blue font indicates hyperlinks – presentation must be in ‘Slide Show’ mode to activate the link
Red bold font indicates a point of emphasis
Green bold font indicates CO’s personal comment or perspective

4. Introduction
The purpose of this podcast is to explain what an ACRN is:
ACRN is a acronymized word
It stands for Accounting Classification Reference Number
In short, it is how the money is tracked on contracts
And that’s kind of important.

5. What is an ACRN? Accounting Classification Reference Number
DFARS :
Means any combination of a two position alpha/numeric code used as a method of relating the accounting classification citation to detailed line item information contained in the schedule
This is how the government allocates funding for government contracts
It is one of the ways that we track the "Color of Money" in contracts
Color of Money = how we track the funding sources (see Episode 019)
Contract may have one, several, or a LOT of ACRNs because they have one, many or a LOT of funding sources

6. What is an ACRN? “Long Line Accounting” Classification Data:
Comprised of seven to twelve fields of data
Each service may be a little different, but the idea is the same
They use two letters only
How do other agencies do it? Appears to be DoD only
Good news: rather than using the “long line of accounting”, ACRN is usually only two letters
AA, AB, AC, AD, ….BA, BB, BC…and so on
ACRNs cannot repeat, so we can end up with a LOT of them
I’ve gotten as high as CD, for those of you counting, that’s 55

7. When do ACRNs happen?
Acquisition Time Zones (from Podcast Episode 003)
Requirements Zone
Market Research Zone
RFP Zone
Source Selection Zone (or sole source)
Execution Zones: Kick Off, Transition (Ramp Up), Performance, Re-compete

8. Why are ACRNs important?
It is how the money is segregated on the contract
Remember CLINs? Brief explanation:
Contract Type = foundation of contract
CLINs = frame of the house
ACRNs = the plumbing and electricity

9. Why are ACRNs important?
ACRNs = the plumbing and electricity
Without them, the building can STAND, but it will not WORK!
If you have more than one ACRN, everyone needs to understand the expectations for billing
FIFO (First-In, First-Out)?
Proportional?
CHECK THE PAYMENT INSTRUCTIONS! (Section G)

10. Why are ACRNs important?
More ACRNs = more insight into how money is obligated & expended
Which seems good, BUT...
More ACRNs = more administrative effort unrelated to the actual work or mission
Which is bad, unless you are an administrator
This will create a lot of extra administrative work if done later, or incorrectly

11. Why Should Government Care?
If a CO signs the contract without it, it is a violation of the Anti-Deficiency Act
In short, it is like writing a check that will bounce
ACRNs are the details that can create lots of modifications to the contract
The plumbing needs to work:
Leaks are bad (Ex. Funding sources dry up, money expires)
Stopped up pipes are bad (Ex. wrong funding source, ACRN does not match year)
Frozen pipes are bad (Ex. Money is not obligated to the right CLIN)

12. Why Should Government Care?
Do not expect the contractor, or maybe even your customer, to understand them
ACRNs are the contract’s way of accommodating the needs of accounting folks
Use them to manage funds OUTSIDE the contract
It’s also how the money is ‘managed’ on the contract THIS IS A SLIPPERY SLOPE…
More ACRNs means more administrative effort

13. Why Should Government Care?
Recent (horrifying) development: Creating "informational SubCLINs" for each ACRN
Back to CLINs: use them to segregate work that requires a different contract type or is otherwise different
Every CLIN creates work for both sides, “administrivia”
Orchard, Rows, Trees, Apples, Seeds

14. Why Should Industry Care?
Describes how contractors prepare and submit invoices
This is how the money is bucketed on the contract
In most cases, you will have to track funding by ACRN and identify the ACRN when you bill
It was not always like this:
You used to just send a bill by CLIN
The Government was responsible for deciding which money to use (commonly, pay using oldest funds first)
If you understand how it works, your government customer will find you easier to deal with

15. Why Should Industry Care?
Little secret:
Government team also thinks ACRNs are a byzantine quagmire of codes and complexity
But it’s the system we have…
Understand how your customer uses ACRNs – it will drive how much administrative support your contract requires
It pays to know how this works, BECAUSE….

16. Why Should Industry Care?
If you screw this up:
You will not get paid in a timely manner
Or not at all if you never figure it out
It will cost you money for administrative time
It will frustrate you and your customer
It will PREVENT YOU FROM GETTING FUTURE CONTRACTS!

17. Summary
ACRNs may be out of control as the Government struggles to create auditable books
Like plumbing, no one likes it (except plumbers), but we all want it to work
Expect this to get worse before it gets better
Once again, communication is key
Both sides understanding what ACRNs are (and are NOT) makes contract management much easier

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