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    Can you use RDT&E at the start of the project and shift during development and use O&M funds? RDT&E funds are available now and can be used, but the contract will expire in mid stream of the development and no RDT&E funds will be available and only O&M funds, but the project is still in development and not in production. Can you execute this project and fund it starting with one appropriation and change after knowing the type of appropriate and its intended purpose and usage. Please advise. Thanks.


    Answer

    The DoD FMR (Vol. 2A, Chapter 1, Section 010213.states RDT&E funds can be used for 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).  It also states RDT&E funds can be used for 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.

    The FMR (Volume 2A Chapter 1 Section 010201) states that O&M funding can be used for consumables necessary to operate and maintain DoD to include:

    Civilian, military, and contractual labor
    Equipment and facilities leases
    Expendable supplies and materials
    Equipment maintenance, repair, overhaul, and rework

    Although efforts funded with RDT&E and O&M can be related, it is unusual to have an effort’s funding split between the two appropriations.  Just because you don’t have the right appropriation is not a legal reason to use the wrong color of money.  A program can’t change the appropriation used from RDT&E to O&M to complete an effort based on the fact that it’s the only appropriation that they have. An important factor to consider is what is shown in the budget exhibits.  The budget exhibits are the basis for Congress appropriating the budget authority.  The requirement for your effort should have been identified in your budget exhibits and the appropriate type of funds identified. 

    .We strongly encourage your team review the DoD FMR and contact your Comptroller Office or Legal Counsel Office before making a final determination.  

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