DEFENSE LOGISTICS AGENCY

 HEADQUARTERS

 8725 JOHN J. KINGMAN ROAD

 FORT BELVOIR, VIRGINIA 22060-6221

October 04, 2017

MEMORANDUM FOR SUPPLY AND SUPPLY DISCREPANCY REPORT (SDR) PROCESS 

REVIEW COMMITTEE (PRC) MEMBERS

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

1269, Revision to Kind, Count, and Condition (KCC) Inspection Requirements at 

DLA Distribution Centers (MILSTRAP/SDR/Supply) 

We are forwarding the attached approved change to DLM 4000.25, Defense Logistics 

Management Standards, and DLM 4000.25-2, Military Standard Transaction and Accountability 

Procedures (MILSTRAP). This change is effective immediately; DLA Distribution Centers have 

implemented revised procedures. 

Addressees may direct questions to Ms. Mary Jane Johnson, Mr. Rafael Gonzalez, Mr. Ben 

Breen, or Ms. Ellen Hilert at email: DLMSSupply@dla.mil. All others must contact their 

Component designated Supply PRC representative or SDR PRC representative available at 

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

HEIDI M. DAVEREDE

Program Manager 

Enterprise Business Standards Office

Attachment

As stated

cc: 

ODASD (SCI)

OUSD DPAP (PDI)
Attachment, ADC 1269

Page 1

ADC 1269

Revision to Kind, Count, and Condition (KCC) Inspection 

Requirements at DLA Distribution Centers

1. ORIGINATING SERVICE/AGENCY AND POC INFORMATION:

a. Office: Defense Logistics Agency (DLA) Logistics Operations

b. Functional POC: DLA HQ, J-345 IM, Troy Brown, Telephone COMM: 709-767-

3979, email: troy.brown@dla.mil

2. FUNCTIONAL AREA: Receiving

a. Primary/Secondary Functional Area: Stock Readiness/Receiving

b. Primary/Secondary Functional Process: Supply Discrepancy Reporting

3. REFERENCES:

a. Defense Logistics Manual (DLM) 4000.25-2, Military Standard Transaction 

Reporting and Accountability Procedures (MILSTRAP), Chapter 7

b. DLM 4000.25, Defense Logistics Management Standards (DLMS), Volume 2, 

Chapter 17

c. DoDM 4140.01 Volume 5, DoD Supply Chain Materiel Management Procedures: 

Delivery of Materiel

d. DLAI 4145.4/AR 740-3/AFMAN 23-125(IP)/NAVSUPINST 4400.100A/MCO 

4450.15A, Joint Service Instruction Stock Readiness, November 9, 2012

4. APPROVED CHANGE(S):

a. Brief Overview of Change: This change revises MILSTRAP (Reference 3.a.) and

DLMS Volume 2 (Reference 3.b.) to clarify and document the kind, count, and condition (KCC) 

inspection process at DLA Distribution Centers. DODM 4140.01 (Reference 3.c) directs 

Components to conduct an inspection during the receipt process but does not clarify the 

procedures for the KCC inspection process. MILSTRAP and DLMS procedures define the 

reporting requirements for discrepant materiel found during receipt, but do not clarify the 

procedures for conducting the KCC inspection process. The current Stock Readiness policy, 

DLAI 4145.4 (Reference 3.d.) does have specific instructions regarding the bare item part 

number verification process under KCC. This change will further clarify KCC of the bare item 

part number verification process for new procurement receipts under MILSTRAP and DLMS in 

line with DLAI 4145.4 as conducted at DLA Distribution Centers. Specifically, DLA 

Distribution Centers will conduct the part number verification for non-critical new procurement 

items by verifying the part number/NSN in the contract to the Military Standard (MIL-STD) 129 
Attachment, ADC 1269

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label. DLA Distribution Centers will perform all other aspects of the KCC process. Critical 

items and non-procurement items will be subject to part number verification to bare item

markings.

b. Background: 

(1) DODM 4140.01, Volume 5, Enclosure 3, paragraphs 8.d and 8.e. direct 

receiving activities to establish receipt control procedures to record the status of materiel in the 

storage process. Receiving activities are also directed to: perform inspections, acceptance, 

reflect the actual condition of the materiel, reflect the quantity of the materiel received, and 

report discrepancies.

(2) DLM 4000.25, Volume 2, chapter 17, paragraph C17.3.2.1.2. directs 

reporting of discrepant shipments from contractors/manufacturers or vendors.

(3) DLM 4000.25-2 MILSTRAP, Chapter 4, paragraph C4.9.1.1. (and 

comparable guidance under DLMS, Volume 2, C13.2.8.2.1) states “Upon receipt of all incoming 

materiel shipments, from procurement and non-procurement sources, storage activities will

research all available documentation and item markings to determine the receipt data (i.e., 

document number, NSN, or other item identification number, PMR or due-in data, quantity, 

condition, inspection/ acceptance requirements, etc.). Using this data, storage activities will

determine if a discrepancy/deficiency (hereafter referred to as discrepancy or discrepant) exists 

and will identify its nature.”

(4) DLAI 4145.4, Stock Readiness, paragraph 7.a. defines two ways to determine 

“Kind” during the receiving process. “An inspection of the bare item verifying the part-number 

against the assigned national stock number (NSN), or a verification that the documentation 

corresponds with the identification label in accordance with MIL-STD-129 marking 

requirements.” This is further refined under receiving procedures for DLA Distribution Centers 

in paragraph E.1.a.

(5) DLA Distribution, as part of a Continuous Process Improvement initiative,

has identified verifying “kind” during the KCC inspection process for new procurement by 

matching the documentation with the identification label to verify part number to be a more 

efficient and low risk process. All other aspects of the KCC inspection process remain 

unchanged.

(6) Defense Threat Reduction Agency (DTRA) identifies specific nuclear 

weapons related materiel (NWRM) items and the associated NSNs have a NWRM flag in the 

Federal Logistics Information System (FLIS). The Distribution Standard System (DSS) will not 

process these items without supervisor approval and will be subject to a more stringent 

inspection. 

(7) Critical safety items (CSIs) are source inspected and do not require a bare 

item verification in accordance with (IAW) DLAI 4145.4, et al. However, item managers do 

place CSI alert messages into DSS that may require bare item verification based on Commercial 

and Government Entity Code (CAGE) or contract number. DLA Distribution will follow these 

CSI alert restrictions under standard procedures.
Attachment, ADC 1269

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c. Approved Change in Detail: Green highlighting identifies substantive changes 

subsequent to staffing.

(1) Incorporate the specific KCC inspection process DLA Distribution performs 

into the appropriate manuals to include DLM 4000.25 and DLM 4000.25-2.

(2) Allow DLA Distribution to utilize verification that the documentation 

corresponds to the part number listed on the identification label for new procurement receipts for 

both source-inspected items and destination-inspected items. DLA Distribution Centers will use 

this method to satisfy the part number verification portion of the KCC inspection process. 

(3) DLA Distribution will continue to perform a bare item part number 

verification for new procurement receipts when the item is identified as:

(a) NWRM with a NWRM flag assigned in the FLIS,

(b) a controlled item identified by controlled item identification code in 

FLIS (classified, sensitive, pilferable, and radioactive), or

(c) if directed by a systemic alert notification to verify a bare item part 

number (identified by a receipt restriction screen in DSS based upon the manager’s stock 

screening request).

(4) This change only affects non-critical new procurement receipts at DLA 

Distribution Centers received for storage at the DLA Distribution Center. This change does not 

apply to other types of receipts at DLA Distribution Centers such as non-procurement receipts. 

(5) This change includes an unrelated administrative update to DLM 4000.25 

Chapter 13 to replace the term advance receipt information (ARI) with the more common term 

pre-positioned materiel receipt (PMR) used in the DLM 4000.25-2 MILSTRAP Manual. This 

will be a global change in the chapter. The Enterprise Business Standards Office will update 

ARI to PMR in other affected DLMS chapters as they are revised by other PDCs.

d. Revisions to DLM 4000.25 Manuals:

(1) Revise DLM Volume 2, Chapter 13 to replace all occurrences of “advance 

receipt information (ARI)” with “pre-positioned materiel receipt (PMR)” (and just the acronym 

as applicable).

(2) Revise DLM Volume 2, Chapter 13 to read: 

“C13.2.8.2. Processing Discrepant/Deficient Receipts

C13.2.8.2.1. Discrepancy Determination. Upon receipt of all incoming materiel 

shipments, from procurement instrument and non-procurement instrument sources, receiving 

activities will research all available documentation and item markings (i.e., transaction or 

contract number, national stock number (NSN), or other, item identification number, ARI PMR

file, quantity, condition, inspection/acceptance requirements, etc.) to determine the receipt data. 
Attachment, ADC 1269

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Using this data, receiving activities will determine if a discrepancy/deficiency (hereafter referred

to as discrepancy or discrepant) exists and will identify its nature. DLA Distribution will 

perform a kind, count, and condition (KCC) inspection during receipt to determine materiel 

condition and completeness and identify any discrepancies that may exist. KCC inspection is 

applicable to materiel received for storage at the DLA Distribution Center. “Kind” includes 

an inspection of the bare item verifying the part number against the assigned NSN, or a 

verification that the documentation corresponds with the identification label in accordance 

with MIL-STD-129 marking requirements. 

C13.2.8.2.1.1. DLA Distribution Centers do not perform bare item part 

number verification for new procurement except when the materiel is identified as nuclear 

weapons related materiel (NWRM) or controlled (classified, sensitive, pilferable, and 

radioactive) or if directed by a systemic alert notification to verify a bare item part number. 

C13.2.8.2.1.2. For all other receipts, DLA Distribution Centers will 

perform bare item part number verification unless specified under MIL STD 130 that no bare 

item marking exists.”

(3) Revise DLM 4000.25, Volume 2, Chapter 17 to read: 

“C17.3.2.1.2. Contractor/Manufacturer or Vendor Shipments. Report 

discrepant shipments from contractors/manufactures or vendors that meet conditions cited under 

reporting criteria regardless of dollar value. DLA Distribution Centers will perform kind, 

count, and condition (KCC) inspection during receipt to determine if any discrepancies exist 

in accordance with MILSTRAP (refer to C13.2.8.2. Processing Discrepant/Deficient 

Receipts).”

(4) Revise DLM 4000.25-2, Chapter 4 to read:

“C4.9. PROCESSING DISCREPANT/DEFICIENT RECEIPTS

C4.9.1. General

C4.9.1.1. Upon receipt of all incoming materiel shipments, from procurement and 

nonprocurement sources, storage activities will research all available documentation and item 

markings to determine the receipt data (i.e., document number, NSN, or other item identification 

number, PMR or due-in data, quantity, condition, inspection/ acceptance requirements, etc.). 

Using this data, storage activities will determine if a discrepancy/deficiency (hereafter referred to 

as discrepancy or discrepant) exists and will identify its nature.”

(Intervening text not shown)

Insert new paragraph C4.9.1.1.4, and renumber current paragraph C4.9.1.1.4. as C4.9.1.1.5. 

C4.9.1.1.4. Perform a Kind, Count, Condition (KCC) inspection during 

receipt to determine materiel condition and completeness and identify any discrepancies that 

may exist. KCC inspection is applicable to materiel received for storage at the DLA 

Distribution Center. “Kind” includes an inspection of the bare item verifying the part number 
Attachment, ADC 1269

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against the assigned NSN, or a verification that the documentation corresponds with the 

identification label in accordance with MIL-STD-129 marking requirements. 

C4.9.1.1.4.1. DLA Distribution Centers do not perform bare item part 

number verification for new procurement except when the materiel is identified as nuclear 

weapons related materiel (NWRM) or controlled (classified, sensitive, pilferable, and 

radioactive) or if directed by a systemic alert notification to verify a bare item part number. 

C4.9.1.1.4.2. For all other receipts, DLA Distribution Centers will 

perform bare item part number verification unless specified under MIL STD 130 that no bare 

item marking exists.”

e. Transaction Flow: No change.

f. Alternatives: None identified.

5. REASON FOR CHANGE: To clarify receipt KCC inspection criteria and incorporate the

criteria into DLM 4000.25 and DLM 4000.25-2. Both manuals allude to performing a KCC 

receipt inspection with reporting criteria for discrepant receipts, but the guidance does not 

specify use of a KCC process. Incorporating this language specifies a KCC inspection and 

clarifies the methods of determining part number verification during the “kind” inspection.

6. ADVANTAGES AND DISADVANTAGES: 

a. Advantages: Clarifies the KCC inspection process especially the methods of 

determining part number verification.

b. Disadvantages: None identified.

7. ADDITIONAL FUNCTIONAL REQUIREMENTS: DLA has identified the process 

change for KCC to be low risk; however, there is a potential for discrepancies to escape 

detection allowing materiel to be accepted, stored, and ultimately shipped to customers. 

Customers may report such discrepancies to the shipper and/or the source of supply (via 

Document Type 7 SDR). If the distribution center can attribute the customer-identified 

discrepancy to a specific contract, the distribution center must explain the source of the 

discrepancy and provide the contract number in SDR reply remarks forwarded to the source of 

supply for action (via 300-series forwarding reply). The source of supply retains responsibility 

for corrective action supporting the customer to include reimbursement or replacement materiel

when appropriate. Additionally, the source of supply will coordinate with the Defense Contract 

Management Agency (DCMA) and/or the contractor to ensure contract compliance and any 

necessary reimbursement to the source of supply. 

Staffing Note: DLA must coordinate with EBSO to document (as a separate DLMS change) the 

appropriate procedures and data requirements when the above situation occurs.

8. ESTIMATED TIME LINE/IMPLEMENTATION TARGET: Immediately.

9. ESTIMATED SAVINGS/COST AVOIDANCE ASSOCIATED WITH 

IMPLEMENTATION OF THIS CHANGE: This creates efficiencies for DLA Distribution 
Attachment, ADC 1269

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storage sites when inducting new procurement receipts. The expected gain is an 8 percent

reduction of receipt times for destination inspected new procurement receipts.

10. IMPACT: 

a. New DLMS Data Elements: None.

b. Changes to DLMS Data Elements: None.

c. Automated Information Systems (AIS): None.

d. Defense Automatic Addressing System: None.

e. Non-DLM 4000.25 Series Publications: DOD Components may need to update 

internal guidance to comply with this DLMS change.

11. PROPOSED DLMS CHANGE (PDC) 1269 STAFFING RESPONSE/COMMENT 

RESOLUTION:

Originator Response/Comment Disposition

1. Army Concur Noted.

2. Navy Concur Noted.

3. Air Force Concur Noted.

4. Marine Corps Concur Noted.

5. DLA

DLA 

Distribution

Concur

The PDC includes specific exceptions requiring 

bare item inspection, but fails to mention an 

exception due to receipt restrictions built from 

stock screening requests for new procurement. 

EBSO requested clarification for DVD shipments 

of requisitioned materiel. DLA responded that 

DLA Distribution does not perform KCC on direct 

turnover (DTO) to customers (e.g. requisitioned 

materiel), but will perform KCC inspection on 

DVD shipments of requisitioned materiel stored in 

the DLA Distribution Center.

Noted.

DLA concurs. Exception added for 

clarification.

ADC updated to indicate that KCC 

inspection applies to materiel stored in 

the DLA Distribution Center. 

6. DSCA Concur with comment:

NAVSUP (Navy FMS) stated: We will need to 

"wait and see" if the new procedures cause an

increase in quality or wrong item issues.

In the meantime, we have no basis to say that there 

will be an increase in problems without further 

user monitoring.

Noted.
Attachment, ADC 1269

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Originator Response/Comment Disposition

We will concur with reservations.

7. USTRANSCOM Abstain Noted.