Can you use O&M funds for a repair/construction project that will last longer than 1 year?
The question asked revolves around the use O&M funds for a repair/construction project that will last longer than 1 year.
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31 USC Section 1502 – Bona Fide Need
(a) The balance of an appropriation or fund limited for obligation to a definite period is available only for payment of expenses properly incurred during the period of availability or to complete contracts properly made within that period of availability and obligated consistent with section 1501 of this title.
This language indicates that O&M funds can be used for a requirement arising in the year the O&M funds are available. These funds can be expended beyond the fiscal year to pay for that requirement.
The Financial Management Regulation (FMR) 7000.14-R Volume 3 Chapter 17 Section 170302 goes into great detail concerning the use of funds for unspecified Minor Military Construction - see below:
170302. Unspecified Minor Military Construction A. Projects that involve the acquisition of new construction, addition, expansion, extension, alteration, conversion, replacement, or installation of permanent or temporary facilities (except family quarters) are minor construction projects when:
1. The cost of the project does not exceed such amount as may be specified by 10 U.S.C. § 2805 for the Active Components and 10 U.S.C. § 18233a for the Reserve Components, and 2. The project has not been included in the budget request as a specific line item.
B. For other than family housing facilities, when the cost of a project is less than the amount specified in 10 U.S.C. § 2805, the project must be financed from unspecified minor construction appropriations; operations and maintenance (O&M) appropriations; research, development, test and evaluation (RDT&E) appropriations; working capital fund resources; or other resources, as appropriate. The funding source does not influence the financial statement capitalization requirements described in subparagraph 170602.A.
C. As of the date of this chapter, the dollar limits on minor construction are:
1. An unspecified minor military construction project will have an approved cost equal to or less than $3 million. (See 10 U.S.C. § 2805, as amended.) 2. For a military construction project intended solely to correct a deficiency that is life threatening, health threatening, or safety threatening, an unspecified minor military construction project may have an approved cost equal to or less than $4 million. (See 10 U.S.C. § 2805, as amended.) 3. Minor military construction projects for the Reserve Components are valued at less than $750 thousand. (See 10 U.S.C. § 18233a).
4. O&M Funds may be used to carry out an unspecified minor military construction project costing not more than $1 million. (See 10 U.S.C. § 2805, as amended.)
D. Project guidelines include:
1. Notwithstanding any other provisions for approval of minor construction projects, no project may be proposed to be accomplished under minor construction authority that previously has been deleted by the Congress from proposed military construction authorization legislation or otherwise disapproved of by the Congress.
2. Each project accomplished under the minor construction authority must result in a complete real property facility or improvement.
3. Each project must, to the maximum extent possible, be consistent with the appropriate installation master plan. Requests for project approval must fully disclose the relation of the project to the master plan and must detail further planned construction to the same or closely related facilities.
4. The planned acquisition of, or improvement to, a real property facility through a series of minor construction projects; that is, incremental type construction is prohibited.
E. Notification requirements include:
1. When a minor construction project costing more than amounts established in 10 U.S.C. § 18233a is undertaken, appropriate congressional committees must be notified prior to the start of the project. The project then may be carried out only after the end of the 21-day period beginning on the day the notification is received by the committees, or if earlier, the end of the 14-day period beginning on the date on which an electronic copy of the notification is provided in an electronic medium pursuant to 10 U.S.C. § 480. Funds cannot be obligated for construction until the committee approves the minor construction.
2. 10 U.S.C. § 2805 requires the Secretary concerned to notify, in writing, the appropriate committees of Congress of a decision to undertake an unspecified minor construction project costing more than $1 million. Notification must include the justification and estimated cost of the project. The project may be carried out only after the end of a 21-day period beginning on the date notification is received by the committees (or, if earlier, the end of the 14-day period beginning on the date on which a copy of the notification is provided electronically pursuant to 10 U.S.C. § 480).
F. Additional minor construction provisions include:
1. 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.
2. DoD Components are precluded from using materials, supplies, or items of installed capital equipment on their own minor construction projects on a non-reimbursable basis.
3. Prerequisites for establishing a minor construction project include identification of the required end result of the project and its correlation with the appropriate installation master plan.
4. It is not feasible to prescribe absolute criteria for determining what scope of work would, under all possible circumstances, properly constitutes a separate minor construction project. However, minor construction projects undertaken under the authority of 10 U.S.C. § 2805 must be consistent with the intent of the statute as to what constitutes a separate project.
I strongly recommend you consult with your Comptroller/BFM for specific guidance issued by the Navy.