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  • Question

    Is OMA funding allowable?


    Answer

    The question revolves around the use of Operation and Maintenance, Army, funds for labor and ODE's.  Due to the lack of clarification from the questioner, below is the guidance from the Financial Management Regulation (FMR) 7000.14-R Volume 2A Chapter 1.
     
    The Financial Management Regulation (FMR) 7000.14-R addresses the uses of O&M based on the determination of an expense or investment, see below::
     
    2. The cost definition criteria contained in this policy are only applicable to the determination of the appropriation to be used for budgeting and execution. Cost definitions for accounting purposes are contained in Volume 1.
     
    3. Costs budgeted in the Operation and Maintenance (O&M) and Military Personnel appropriations are considered expenses. Costs budgeted in the Procurement and Military Construction appropriations are considered investments. Costs budgeted in the Research, Development, Test and Evaluation (RDT&E), Base Realignment and Closure (BRAC), and Family Housing appropriations include both expenses and investments.
    Definitions for costs within the Defense Working Capital Funds are provided in Chapter 9 and in Section 010214.
     
    4. Items procured from the Defense Working Capital Funds will be treated as expenses in all cases except when intended for use in weapon system outfitting, government furnished material (GFM) on new procurement contracts, or for installation as part of a weapon system modification, major reactivation, or major service life extension.
     
    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.
     
    The threshold amount of O&M that can be used for Minor Construction comes from Title 10 US Code (USC) 2805 (see 2(c):
     
     (2) An unspecified minor military construction project is a military construction project that has an approved cost equal to or less than $3,000,000. However, if the military construction project is 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 $4,000,000.
     
    (b) Approval and Congressional Notification.-(1) An unspecified minor military construction project costing more than $1,000,000 may not be carried out under this section unless approved in advance by the Secretary concerned. This paragraph shall apply even though the project is to be carried out using funds made available to enhance the deployment and mobility of military forces and supplies.
     
    (2) When a decision is made to carry out an unspecified minor military construction project to which paragraph (1) is applicable, the Secretary concerned shall notify in writing the appropriate committees of Congress of that decision, of the justification for the project, and of the estimated cost of the project. The project may then be carried out only after the end of the 21-day period beginning on the date the 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 in an electronic medium pursuant to section 480 of this title.
     
    (c) Use of Operation and Maintenance Funds.-The Secretary concerned may spend from appropriations available for operation and maintenance amounts necessary to carry out an unspecified minor military construction project costing not more than $1,000,000.
     
    You must ensure that you use the correct color of money and do not exceed the funding that you have available for any appropriation.  If you need additional guidance/direction,  I strongly suggest you consult with you BFM/Comptroller.

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