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  • Question

    Would this action be considered an upgrade to the current tool/application or a new requirement? And, what is the Federal Regulations to support either action. I have advised, and I am suggesting the latter - that this would be a new requirement. Please provide your comments/opinion.


    Answer

    The capability/requirement that you are addressing has not changed, just the operating system/environment/technology and the COTS product you want to use to now satisfy that requirement/to replace the old technology; this is a technology replacement, not a new requirement. 

    In the Department of Defense (DoD), we can use Operations and Maintenance or Research and Development money to purchase a replacement item like this if the cost is less than $250,000 (which this would be).  Is this a question about what color of money can be used to by the new system?  Here is the DoD guidance:

    "When considering O&M appropriations, remember to adhere to the established expense and investment dollar thresholds. The “expense and investment” criteria basically evolve around cost, purpose and whether the item is considered a “centrally managed/controlled item.” Generally, items costing less than $250,000 and not designated for centralized management and asset control are considered “expenses” and are funded with O&M funds but, under some circumstances, they are funded with RDT&E funds. Normally, these items are consumed in routine operations but, more importantly, their cost is relatively low. Investment items are those that cost more than $250,000 and/or are designated for centralized management and asset control. As of 1 October 2002, 10 U.S.C. 2805 (c) permits minor construction projects costing than less than $750,000 to be funded with O&M appropriations. The dollar threshold is raised to $1,500,000 if the project is to resolve a condition that threatens life, health or safety. Generally, investment items are not consumed in routine operations. Investment items may be funded with procurement, MILCON or RDT&E (depending on the item, purpose and dollar amount of the cost). "

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