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  • Question

    What authority is DAU using to justify using the procurement appropriation for procuring LRIP assets


    Answer

    The Financial Management Regulations (DoD 7000.14) addresses the funding of Low Rate Initial Production assets.  Volume 2A Chapter 1 010213 5 a (3) states:
     
    Low Rate Initial Production (LRIP) assets. LRIP,as defined in DoD 5000.2-R, is to provide production configured or representative articles for operational test (RDT&E funded, see paragraph (2)); establish an initial production base for the system (procurement funded); and permit an orderly increase in production rate for the system (procurement funded). If the asset will be used for developmental or operational testing by an independent operational test agency, then it should be procured with RDT&E funds.
     
    Volume 2A Chapter 1 010213 5 d states:
     
    Articles (including end items, weapons, equipment, major test vehicles such as ballistic missile boosters or upper stages, components and materials) of types regularly procured to meet established general requirements such as operational training, operational use, or inventory which are assigned or allocated on a priority basis for use in support of approved R&D programs and which are not consumed in testing, may be financed by Procurement or O&M appropriations using the expense and investment criteria. In addition, excess items that can be made available on a priority basis from existing inventory will be reassigned for use in R&D test and evaluation programs without reimbursement. However, all items, expected to be consumed in R&D test and evaluation will be financed by RDT&E appropriations.
     
    The primary purpose of the LRIP is what determines which funding will be used.  In my experience any LRIP that were known to be planned for operational use were funded with procurement and those that were planned to be consumed during testing were funded with RDT&E.  Recommend that you check with your Command's Comptroller or Legal Department.

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