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    Can procurement fund Weapons Systems Specifications (WSS)?


    Answer

    This response is based on the information provided.  We suggest you discuss with your Comptroller, contracting team, program manager and/or legal department as appropriate.

     

    Based on the information provided, you have asked if the Procurement Appropriation can fund Weapons Systems Specifications.  The Financial Management Regulation (FMR) 7000.14-R Volume 2A Chapter 1 Paragraph 010201 discusses the distinction between expenses and investments.  Procurement is used to fund investments.  The FMR states: 

     

    010201. Criteria for Determining Expense and Investment Costs

                    A. Appropriation accounts form the structure for the President’s budget request and are the basis for congressional action. The appropriations are further organized into

                                    budget activities of appropriations with programs, projects or activities of similar purposes. To support management of the Department of Defense’s programs, projects or activities,                                     resource requirements should be organized and categorized consistently within the appropriation and budget activity structure. The following sections provide guidance for categorizing                           resource requirements into the various appropriations.

     

                    B. Basic Distinctions Between Expense and Investment Costs. The criteria for cost definitions consider the intrinsic or innate qualities of the item such as durability in the

                                    case of an investment cost or consumability in the case of an operating cost and the conditional circumstances under which an item is used or the way it is managed. In all cases where the

                                    definitions appear to conflict, the conditional circumstances will prevail. The following guidance is provided to determine whether a cost is either an expense or an investment. All costs

                                    are classified as either an expense or an investment.

     

                                    1. Expenses are the costs incurred to operate and maintain the organization, such as personal services, supplies, and utilities.

                                  

                                    2. Investments are the costs that result in the acquisition of, or an addition to, end items. These costs benefit future periods and generally are of a long-term

                                    character such as real property and personal property.

     

    The FMR 7000-14-R Volume 2A Chapter 1 Paragraph 010213 states:

     

    010213. Research, Development, Test and Evaluation (RDT&E) - Definitions and Criteria

     

                    A. Definitions. The term "research and development (R&D)" is intended broadly to include the work performed by a government agency or by private individuals or

                                    organizations under a contractual or grant arrangement with the government. It includes R&D in all fields, including the physical sciences, engineering, etc.

     

                    1. Research is systematic study directed toward fuller scientific knowledge or understanding of the subject studied.

     

                    2. Development is systematic use of the knowledge and understanding gained from research, for the production of useful materials, devices, systems, or methods, including the design and development of                                   prototypes and processes.

     

                    B. General Criteria. When, after consideration of the following criteria, there is doubt as to the proper assignment of costs between appropriations, the issue should be

                                    resolved in favor of using RDT&E funding. In general, the types of costs to be financed by

     

                    RDT&E and related appropriations are: 

                  

                    1. RDT&E Appropriations

                  

                                    a. RDT&E will finance research, development, test and evaluation efforts performed by contractors and government installations, including procurement

                                    of end items, weapons, equipment, components, materials and services required for development of equipment, material, or computer application software; its Development Test and Evaluation

                                    (DT&E); and its Operational Test and Evaluation (OT&E) as provided for in paragraph C.5. (Test Articles and Test Support) below.

     

                                    b. The operation of R&D installations and activities engaged in the conduct of R&D programs, including direct and indirect efforts, expense and investment costs.

     

                                    c. The acquisition or construction of industrial facilities costing less than $750,000 at government owned, government operated (GOGO) facilities under

                                    the criteria of DoD Directive 4275.5 as provided for under 10 U.S.C. 2805 (unspecified minor construction). Use of RDT&E funds for acquisition and construction at contractor owned or

                                    contractor operated government facilities is authorized under 10 U.S.C. 2353, Contracts; Acquisition, Construction, or Furnishings of Test Facilities and Equipment.

     

    RDT&E Appropriation has both expense and investment items that can be purchased.  With this information, I then went to the OUSD Comptroller Website under the Budget Materials tab and located the USAF Budget Materials for FY 2022.  I looked through both the RDT&E Docs and the Procurement Docs to ascertain which appropriation normally funds the Weapons Systems Specifications.  My review revealed that the USAF normally uses RDT&E to fund Weapons Systems Specifications.  For the program office, this situation presents a great opportunity for all of the functional areas to discuss the different meanings and definitions to ensure the program requests the correct Appropriation to fund the efforts.

     

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