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  • Question

    What color of funding would be used to purchase the repair data and who would be the authority (source of information) to verify what the proper funding would be?


    Answer

    You trying to ascertain the correct appropriation and source for the information concerning the purchase of repair data for an engine that is no longer in production.  The DOD source of information comes from the Financial Management Regulation (FMR) 7000.14-R Volume 2A Chapter 1.  The FMR states: 
     
    D. Procedures for Determining Expenses Versus Investments.
     
     The following criteria will be used to distinguish those types of costs to be classified as expenses from those to be classified as investments for budgeting purposes:
     
    1. Expenses. Expenses are costs of resources consumed in operating and maintaining the Department of Defense. When costs generally considered as expenses are included in the production or construction of an investment item, they shall be classified as investment costs. Military personnel costs are an exception to this rule. The following guidelines shall be used to determine expense costs:
     
    a. Labor of civilian, military, or contractor personnel.
     
    b. Rental charges for equipment and facilities.
     
    c. Food, clothing, and fuel.
     
    d. Supplies and materials designated for supply management of the Defense Working Capital Funds.
     
    e. Maintenance, repair, overhaul, rework of equipment.
     
    f. Assemblies, spares and repair parts, and other items of equipment that are not designated for centralized item management and asset control and which have a system unit cost less than the currently approved dollar threshold of $250,000 for expense and investment determinations. This criterion is applied on the basis of the unit cost of a complete system rather than on individual items of equipment or components that, when aggregated, become a system. The concept of a system must be considered in evaluating the procurement of an individual end item. A system is comprised of a number of components that are part of and function within the context of a whole to satisfy a documented requirement. In this case, system unit cost applies to the aggregate cost of all components being acquired as a new system.
     
    g. Cost of incidental material and items that are not known until the end item is being modified are conditional requirements and are considered expenses because the material is needed to sustain or repair the end item.
     
    h. Engineering efforts to determine what a modification will ultimately be or to determine how to satisfy a deficiency are expenses.
     
    i. Facilities sustainment, O&M-funded restoration and modernization projects. Planning and design costs are excluded from the cost determination for purposes of determining compliance with the amounts established in 10 U.S.C. 2805 for minor construction projects; however, design costs are not excluded from capitalization.
     
    The Operation and Maintenance (O&M) Appropriation covers the expenses as listed above.  The funding should have been included in the budget documents submitted by your PMO/Command in the form of O-forms or O-documents.  The narratives within the budget documentation should have explained the use of those funds which would cover the costs of the repair data. 
     
    Since the guidance provided above is DOD guidance, you need to check within the AF regulations and with the Comptroller to ensure that there is no stricter regulations that must be followed based on USAF guidance. 
    I strongly suggest you consult with the Comptroller/Funds Certifier on this matter prior to making a purchase.
     

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