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  • Question

    Which inflation rates should be used in order to build our POM for FY19-FY24? Should use a blended rate, or which rate to use?


    Answer

    In order to build a POM/BES submission, you will need to use the weighted index for each appropriation that will have dollars. Therefore, you will have to find the weighted index for RDTEA and the weighted index for your specific type of Procurement.  The Army, and the other Services, has multiple categories of Procurement including, but not limited to, Aircraft (APA), Ammunition (AMMO), Other (OPA), and Weapons and Track Vehicles (WTCV).  The weighted indices are used for the POM/BES builds because they include both inflation and outlay factors for each year to determine Then Year dollar amounts.

     

    The Army and the Department of the Navy have combined to develop an extremely useful tool called the Joint Inflation Calculator (JIC).  The most current version (dated August 2017) can be found at the Naval Center for Cost Analysis (NCCA) website.  The URL for the JIC tool is: https://www.ncca.navy.mil/tools/inflation.cfm   Midway down on the opening splash page, you will find a link to NCCA Inflation Indices and Joint Inflation Calculator.

     

    The JIC is an EXCEL spreadsheet that includes multiple tabs.  The most important tab is the Instruction Tab.  The JIC tool has a tab for Army Multiple Appropriations for finding the correct index by year and appropriation, as well as a Query tab which will allow you to select your Service, Appropriation, what you want to inflate (i.e. Constant Year $ to Then Year $), and the year you want to inflate to (2019-2024).  Once you have those inputs, the Query tab will let you enter your dollar amounts and it will inflate them for you. 

     

    Suggestions:  First, go out and explore the JIC tool.  Second, we most strongly recommended that you contact your local comptroller organization, for more information and their policy interpretation of this issue.  Third, if you still have questions, you can visit the DASA-CE website at https://www.asafm.army.mil/offices/ce/  At that site under “Documents and Resources”, you will see “Rates.” And under “Rates”, you will find a FY17 Inflation Memo and Inflation Guide.  However, both of these products were intended for the FY18 POM/BES build.  Finally, you can call the Office of the Deputy Assistant Secretary of the Army at 703-697-1612.  They can lead you to the most current policy and guidance for the FY19 POM/BES build.

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