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  • Question

    Is that properly funded with O&M or should it be Proc? It is my belief it should be funded with Procurement. The argument I am receiving is you do not include burdens in the unit cost calculation for the threshold. I disagree so I am asking here.


    Answer

    There seems to be confusion on the definition of cost in terms of the DoD FMR and the use of the word cost when negotiating the price of an item.  The cost of procuring an item is the price of that item, which includes all burdens and fees.  Therefore, the full price of the end item is what is used to determine whether or not the expense/investment threshold of $250K has been breached.  So, in the example provided, that item would need to be funded with Procurement funds.  This is spelled out in Volume 2A, Chapter 1, Paragraph 010201.

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