Contractor is recommending a design change to the whole subsystem that would mitigate the DMS issue, bring improvement to capability, and cost about the same. Is there a way to execute this with the 3010 funding and the DMS requirement? The alternative is to redesign the single part for the same cost, and when there's a new requirement for a more capable sub-system, initiate a development program to acquire it.
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My answer is based on researching AFMAN 65-605v1 Chapter 8, Section 8b and the DoDFMR7000.14-R, Volume 2B, Chapter 5, paragraph 050201.
Without knowing all of the specifics, it appears that 3010 funding is appropriate for this effort. But because there is a slight chance that a nuance with your paricular redesign effort may make it more appropriate to fund with RDT&E funds; I strongly suggest you consult with your Program Office, Financial Management, and Fiscal Law subject matter experts. Together you should be able to confirm the correct funding source and avoid violating the Missapropriations Act (Title 31 U.S.C. Sec 1301).