# DLAD APPENDIX K – INTERNAL USE SOFTWARE

APPENDIX K – INTERNAL USE SOFTWARE

Appendix K – Table 1. Contract Line Item Number (CLIN) Capitalization Table for Internal Use Software (IUS)

CLIN | Title | Description | Work Products, Deliverables, and Major Reviews | Example Costs | Capitalized or Expensed?
CLIN 0001 | Acquisition/Design | This phase includes all actions leading to source selection of a commercial off the shelf (COTS) or other commercial source. For internally developed software, this phase includes all actions prior to system requirements specification (SRS). | •Determination of existence of needed technology •Conceptual formulation of alternatives •Evaluation and testing of alternatives •Final selection of alternatives | •Labor •Travel | Expensed
CLIN 0002 | Program Manage-ment | Program management activities include developing budgets, monitoring cost and schedule, forming the project team, and monitoring technical performance of the project. Additional critical functions include risk and issue management, schedule management, earned value management (EVM) metrics and documentation, performance management, and configuration management. It includes identifying all necessary activities required for production readiness and assisting in the development and deployment of the plan. Project management activities are performed across the entire project life-cycle. | •Business Case Analysis (BCA) •Governance Charter •Performance Measurement Plan (PMP) •Scope Document •Formulation Authorization Document (FAD) •System Concept Document •Memorandums of Understanding (MOUs) •Project Schedule (resource loaded) •Acquisition Plan and Documents •Risk Management Plan •Framework Agreement Document •PMC Formulation Request •Budget Documentation •Risk Reviews •Business Impact Assessment •Workforce Analysis • Transition Management Plan •Service Level Agreement • O perations Level Agreement | •Labor •Travel | Program manage-ment office (PMO) indirect costs shall be expensed or capitalized, depending on: 1) their materiality to overall cost of individual software develop-ment projects and 2) in which phase the costs were incurred.
CLIN 0003 | Software Develop-ment | Perform preliminary and detailed design. (This is specific to an implementation). Conduct unit testing. Develop supplemental materials such as end user procedures and job aids. | •Design Documents •Software configuration and interfaces •Software Coding •Technical system documentation •Unit testing plans and results •Software functionality •Development of end user procedures, user manuals and/or job aids •Process flows •Training development | •Labor •Travel | Capitalized
CLIN 0004 | Data Conversion | Data conversion plans developed identifying conversion source systems and the data conversion strategy. The data conversion plan will document the source data layout, business rules requirements, mapping requirements, security requirements, and reporting requirements for each conversion. Mock data conversion tests are conducted and data conversion system requirements specifications developed. | •Data Conversion Plan •Data conversion mapping documentation •Mock data conversions •Migrated data | •Labor •Travel | Expensed
CLIN 0005 | Technical Architec-ture | Technical architecture focuses on the system concept documentation as well as the development of the system environments for design and modeling. Technical architecture develops all system environments for the development and production of the system including: development environment, systems integration testing environments, performance testing environment, training environment, and production environment. | •Operations Plan •Performance Test Plan •Systems Architecture Test Plan • System Integration Test (SIT) -1 Environment •SIT-2 Environment •SIT-3 Environment •Performance Test Environment •Training Environment •Production Environment | •Labor •Travel | Capitalized
CLIN 0006 | Security | Focuses on security requirements for the life-cycle of the project. Initial tasks include the identification of the project security categorization, assessment of security risks, and the documentation of contingency plans. A security business impact assessment is conducted along with security planning, risk mitigation planning, and privacy impact assessments for personal identifiable information (PII) and sensitive data (SD). | •Preventative Controls •Recovery Strategy •Privacy Impact Assessment (PIA) •Sensitive Data Review (SDR) •Security Risk Assessment •Security Risk Mitigation Plan •Security Functional Requirements Analysis Report •Security Assurance Requirements Analysis Report •Cost Considerations and Reporting •Security Controls •Security Test and Evaluation Process •Functional Validation Report •System Integration Rpt •Security Certification and Accreditation Rpt •IT Contingency Plan • Contingency Testing, Training and Exercise Plan •PII / SD Report •Configuration Management and Control Plan | •Labor •Travel | Capitalized
CLIN 0007 | Testing | Testing tracks and documents participation in systems integration testing iterations. The test plans and test scripts will be developed and documented to verify and validate the system design. | •SIT plan •System Integration Test Scripts •Regression Testing •Parallel processing | •Labor •Travel | Capitalized
CLIN 0008 | Deploy-ment | Deployment comprises all tasks completed to prepare the module for production, Go-Live, and stabilization activities. Procedures are developed in support of system transition as well as post “go-live” procedures for the end users and support staff. Interface programs are executed and validated, and volume and stress tests are performed. Also, the project works closely with the users to develop clear performance, service, and business measurements for the system, as well as expectations for metric data collection, evaluation, and reporting. Readiness reviews and operational readiness review (ORR) are conducted and documented within this deployment. go-live includes the formal handover of the module from a preproduction environment to the support staff operating the production environment. Project team members help execute the transition plan and document lessons learned. The module is put into production. System and business performance metrics may be collected and evaluated. | •Operational Readiness Review (ORR) •Project Completion Review (PCR) | •Labor •Travel | Expensed
CLIN 0009 | User Imple-mentation | User implementation focuses on the work and costs associated with the rollout of the software solution to the individual users. This includes activities conducted to aid in identifying user requirements, interfaces, or data migration efforts. It also includes activities associated with actual implementation at specific locations, communication, process redesign, &data cleanup. | •Project Plan •Risk Management Plan •Transition (Cutover) Plan • Operations Plan • Operational Readiness Review (CORR) | •Labor •Travel | Expensed
CLIN0010 | Post-Implementation / Opera-tional Phase | Post-implementation includes all operational testing and evaluation, as well as other functional testing conducted after technical acceptance and includes costs incurred to make customer ease of use changes. | •Application maintenance •Implementation assistance (trouble- shooting, systems analysis, producing/ printing user manuals and similar support to project customers) | •Labor •Travel | Expensed

Table 2. Internal Use Software Acknowledgment Certification

Purpose:

To ensure all costs associated with internal use software (IUS)* activities receive the proper accounting treatment, the Project manager must include the attached contract line item number (CLIN) structure in all IUS requests for proposals (RFP), statement of objectives (SOO), and/or performance work statements (PWS) along with the instructions for invoicing.

Certification:
I certify the following information was included in the:

Document: | CLIN structure included: | If not, state reason:
RFP |  |
SOO |  |
and/or |  |
PWS |  |

Project Name: |
Project Manager: |
Phone: |
E-mail: |

Contracting Officer: |
Phone: |
E-mail: |

Project Manager Signature _____________________________________Date____________

Contracting Officer Signature____________________________________Date____________

All originals must be filed, scanned, and available upon request.

Copies should be provided to the appropriate contracting officer, contracting officer’s representative, program manager, APO, and FSA.

*Software includes the application and operating system programs, procedures, rules, and any associated documentation pertaining to the operation of a computer system or program. "Internal use software" means software that is purchased from commercial vendors "off-the-shelf," internally developed, or contractor-developed solely to meet the entity's internal or operational needs. Normally software is an integral part of an overall system(s) having interrelationships between software, hardware, personnel, procedures, controls, and data.

Reference: Federal Accounting Standards Advisory Board, Accounting for Internal Use Software, Number 10, June 1998; Definitions 8, 9; Page 3.