DEFENSE LOGISTICS AGENCY

 HEADQUARTERS

 8725 JOHN J. KINGMAN ROAD

 FORT BELVOIR, VIRGINIA 22060-6221

October 29, 2019

MEMORANDUM FOR SUPPLY PROCESS REVIEW COMMITTEE (PRC) MEMBERS

SUBJECT: Approved Defense Logistics Management Standards (DLMS) Change (ADC) 

1352, New Status Code for DLA Advance Pay Sales Order Cancellation

The attached change to DLM 4000.25, Defense Logistics Management Standards, is 

approved for staggered implementation. 

Addressees may direct questions to Mr. Eric Flanagan, DOD MILSTRIP Administrator, 

e-mail: EBSO.Supply@dla.mil. Others must contact their designated Supply PRC representative 

available at http://www.dla.mil/HQ/InformationOperations/DLMS/allpoc/

 

DREXEL K. ROSS

Director

Enterprise Business Standards Office

Attachment

As stated 

cc: 

ODASD(Logistics)
Attachment, ADC 1352

Page 1

Attachment to ADC 1352

New Status Code for DLA Advance Pay Sales Order Cancellation

1. ORIGINATING SERVICE/AGENCY AND POC INFORMATION:

a. Technical POC: Defense Logistics Agency, J341 Order Management

b. Functional POC: Defense Logistics Agency, J341 Order Management

2. FUNCTIONAL AREA LOGISTICS AND TRANSACTION CHANGES: 

a. Primary/Secondary Functional Area: MILSTRIP

b. Primary/Secondary Functional Process: Billing

c. Logistics and Transaction Changes (Check All That Apply): 

 Category  Category  Category

X Billing Physical Inventory Contract Admin

Discrepancies / Deficiencies MILSTRAP DoDAAD

Serialization X MILSTRIP MAPAD

Small Arms/Light Weapons MRA LMARS

pRFID Disposition DLM Publications

GFP DOD BRAC

3. REFERENCES:

a. 2017 National Defense Authorization Act for Fiscal Year 2017 (NDAA) Section 883, 

“Pilot Program for Distribution Support and Services for Weapon Systems Contractors”

b. DLM 4000.25, Volume 2, Supply Standards and Procedures, Appendix 7.16 Status 

Codes

4. APPROVED CHANGE(S):

a. Brief Overview of Change: This change establishes a new status code that DLA will 

use to cancel sales orders from non-Federal customers who lack sufficient funds to cover the cost 

of requisitioned materiel under a new process called Advance Pay.
Attachment, ADC 1352

Page 2

b. Background:

(1) The 2017 National Defense Authorization Act (NDAA) Section 883 

(Reference 3.a.) implements a six-year pilot program that allows DLA to make storage and 

distribution services available to contractors.

(2) To overcome regulatory barriers related to contractor-funded orders, DLA 

established a new process called Advance Pay. Advance Pay allows non-Federal customers to 

pay DLA upfront for the storage and distribution services. Under Advance Pay, the contractor 

makes a lump sum payment to DLA. Next, DLA bills the customer for goods and services 

provided by decrementing the customer’s account.

(3) Lockheed Martin is among the first contractors that will participate in an 

Advance Pay arrangement. In support of the F-35 program, Lockheed-Martin agreed to fund 

DLA upfront for all related purchases. DLA will retain the customer’s funds and decrement 

those funds when processing an Advance Pay sales order created from a requisition. This 

process will ensure a seamless payment process and enable faster acquisition of materiel and 

services. DLA may expand the Advance Pay initiative to other non-Federal customers, as 

necessary.

(4) The existing process to support upfront payments requires significant effort 

from DLA Finance, which must manually reconcile the payments. DLA attributed this limitation 

to numerous audit Notice of Findings and Recommendations (NFRs). DLA cannot resolve these 

NFRs without a system change. Furthermore, DLA does not have a method to accept funds from 

private, non-Federal organizations, apply them to the customer’s account, and decrement the 

funds over time.

(5) Advance Pay requires EBS to identify authorized customers and link the sales 

order with the associated funds. However, DLA’s Enterprise Business System (EBS) has limited 

capability to accept advance payments, with the exception of credit card orders placed through 

FEDMALL. Consequently, DLA Order Management coordinated with other DLA organizations 

to establish a systemic way to implement a viable alternative to FEDMALL.

(6) DLA will create an advance payment request after receiving the upfront funds 

from the customer. The EBS customer master will turn on pre-payment functionality for the 

customer’s account. This functionality will allow DLA to decrement the customer’s funds and 

track them over time. In addition, this process will decrease open accounts receivable by 

allowing DLA to collect the funds prior to invoicing the sales orders. 

(7) DLA requires a new supply status code to notify the customer of a sales order 

cancellation resulting from insufficient Advance Pay funds. This ADC establishes the supply

status code and documents the high-level procedures. The new supply status code is not 

applicable to non-Advance Pay sales orders.

c. Approved Change in Detail: This change revises DLM 4000.25, Volume 2, 

Appendix 7.16 Status Codes (Reference 3.b.) to include the new status code and associated 

definition (see section 4.d.). 
Attachment, ADC 1352

Page 3

d. Revisions to DLM 4000.25 Manuals: Add new Status Code PU to DLM 4000.25, 

Volume 2, Appendix 7.16:

CODE EXPLANATION

PU Rejected. Unable to process non-Federal requisition due to insufficient 

funds available via Advance Pay. Provide additional funding for Advance 

Pay requirement and resubmit under new document number if still 

required.

e. Approved Transaction Flow: This ADC does not establish a new transaction flow. 

EBS will use the DLMS 870S Supply Status to convey the status code.

f. Alternatives: None identified.

5. REASON FOR CHANGE: DLA J3, Order Management and DLA J8, Finance requested 

this change to allow DLA to reject requisitions from non-Federal customers that lack sufficient 

Advance Pay funds.

6. ADVANTAGES AND DISADVANTAGES: 

a. Advantages: This change automates DLA’s ability to allow non-Federal customers 

to provide upfront funding for requisitioning. DLA would no longer need to manually track and 

reconcile funds associated with the customer’s account. 

b. Disadvantages: None identified.

7. ESTIMATED TIME LINE/IMPLEMENTATION TARGET: TBD

8. ESTIMATED SAVINGS/COST AVOIDANCE ASSOCIATED WITH 

IMPLEMENTATION OF THIS CHANGE: None identified.

9. IMPACT: 

a. New DLMS Data Elements: None

b. Changes to DLMS Data Elements: Update Supply Status to add the new code, PU.

c. Automated Information Systems (AIS):

(1) Participating information systems must recognize and process the new status 

code.

(2) DLA EBS and FEDMALL must implement the new status code and the 

associated processes.

d. Defense Automatic Addressing System (DAAS): This change does not affect 

DAAS.
Attachment, ADC 1352

Page 4

e. Non-DLM 4000.25 Series Publications: DLA must update the Customer Handbook 

and applicable agency publications. Participating Service/Agencies should update publications 

as needed.

10. PROPOSED DLMS CHANGE (PDC) 1352 RESPONSE/COMMENT RESOLUTION:

Component Response/Comment Disposition

1. DLA Concurs without comment As noted. 

2. Navy Concurs without comment As noted.

3. Air Force Concurs without comment As noted.

4. US Army No Response

5. USMC Concurs without comment As noted.

6. DAAS No Response

7. USTRANSCOM No Response

8. DCMA Concurs as written. As noted.