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  • Question

    Are procurement funds obligated to an organic industrial base for production, such as production of ammunition, considered in the 50/50 calculation?


    Answer

    To the extent that procurement funds are used for any depot maintenance and repair workload (per 10 USC 2460), such funds should be reported in the annual “50/50” report (per 10 USC 2466).  All funds used for depot maintenance and repair workloads must be reported in the annual “50/50” report, regardless of the source of funds or the location at which the work is performed.

    Additionally, the term “calculation” does not apply to “50/50” report.   The “50/50” annual report covers the funds that were “expended during the preceding fiscal year, and are projected to be expended during the current fiscal year and the ensuing fiscal year.”

    References:

    10 USC 2466: “Not more than 50 percent of the funds made available in a fiscal year to a military department or a Defense Agency for depot-level maintenance and repair workload may be used to contract for the performance by non-Federal Government personnel of such workload for the military department or the Defense Agency.”

    10 USC 2466: The annual 50/50 report covers the funds that were “expended during the preceding fiscal year, and are projected to be expended during the current fiscal year and the ensuing fiscal year, for performance of depot-level maintenance and repair workloads by the public and private sectors.”

    10 USC 2460: “The term "depot-level maintenance and repair" means (except as provided in subsection (b)) material maintenance or repair requiring the overhaul, upgrading, or rebuilding of parts, assemblies, or subassemblies, and the testing and reclamation of equipment as necessary, regardless of the source of funds for the maintenance or repair or the location at which the maintenance or repair is performed.”

    This response has been coordinated with the Office of the Deputy Assistant Secretary of Defense for Materiel Readiness staff.

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