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  • Question

    What is the reference for using O&M to divest obsolete/excess military equipment.


    Answer

    Expenses are “the costs incurred to operate and maintain [DOD], such as services, supplies, and utilities.” Expenses are normally financed with Operation and Maintenance (O&M) appropriations. Appropriation categories may be considered broad, generic groupings or “types” of federal government funds. While grouping appropriation funds into broad categories make it convenient for general discussion purposes such as linking a specific budgeting policy to each category, a more definitive breakout of federal government funds is that of appropriation account or expenditure account.

    Federal agencies submit their budget requests to Congress – and Congress appropriates funding in the annual appropriation acts – by the more specific appropriation expenditure account terminology. There are hundreds of individual appropriation expenditure accounts associated with DoD. The Bureau of the Fiscal Service of Department of Treasury is responsible for maintaining the listing of all current appropriation expenditure accounts of the federal government. This listing is published in the Federal Account Symbols and Titles.  Volume 2A, Chapter 1, of the FMR provides guidance as to the proper use of these appropriations categories to finance program efforts. A summary of this guidance is provided below: 

    The O&M category is also composed of many appropriation account titles, e.g., Operation and Maintenance Army, Operation and Maintenance Marine Corps Reserve, Operation and Maintenance Air National Guard, etc. O&M appropriations traditionally do not finance investments, but rather those things whose benefits are derived for a limited period of time, i.e., expenses. Examples of costs financed by O&M funds are headquarters operations, civilian salaries and awards, travel, fuel, minor construction projects of $1M or less, expenses of operational military forces, training and education, recruiting, depot maintenance, purchases from Defense Working Capital Funds (e.g., spare parts), base operations support, and assets with a system unit cost less than the current procurement threshold ($250K). 

    Within the DoD, the disposal authority has been delegated to the Defense Logistics Agency (DLA) Disposition Services (formerly known as Defense Reutilization and Marketing Service – DRMS)  to establish a standardized process for the disposal of durable (investment item) DoD property (including military equipment) purchased with appropriated funds. See Defense Manual (DoDM)  4160.21, Vol. 2, Defense Materiel Disposition: Property Disposal and Reclamation. See also DRMS-I 4160.14, chapter 8 for environmental compliance rules.  67 DoDM 4160.21, Vol. 2, Enclosure 4.  68 See DRMS-I 4160.14.  See DOD FMR, vol. 2A, ch. 1, para. 010201.B.1.


    https://www.dau.mil/acquipedia/Pages/ArticleDetails.aspx?aid=9f96cbe4-ed8f-4d20-94c9-b89130c0eb70 
    http://www.marines.mil/Portals/59/Publications/MCO%2011000.5.pdf?ver=2016-06-08-123207-950
    See “LCS Publications” at https://tjaglcspublic.army.mil. The citation is as follows: CONT. & FISCAL L. DEP’T, THE JUDGE ADVOC. GEN.’S LEGAL CENTER & SCH., U.S. ARMY, FISCAL LAW DESKBOOK (2018).

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