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    Can Civil Engineering projects be funded with 6.3? Can you point me to any guidance that limits the type of funding that can be used on CE Projects?


    Answer

    There are in fact situations when RDTE funds can be used for construction.

    DoD Financial Management Regulation 7000.14-R, Volume 2A, Chapter 1, paragraph 010213 contains a discussion of the uses of RDTE funding.  Below is the most relevant section from DoD Financial Management Regulation 7000.14-R, Volume 2A, Chapter 1, paragraph 010213 with regards to this question:


    010213 B.2.
    Facilities Construction and Modification. When it is determined that DoD financing of real property projects is required, the projects shall be programmed, budgeted, and financed as follows:
     
    a. Government-Owned, Government-Operated (GOGO) Facility on Government Land. When GOGO property is to be constructed on government-owned land, such construction will normally be financed as a Military Construction project. Construction of facilities for RDT&E costing $750,000 or less may be funded with RDT&E appropriations. Such expenditures are authorized under 10 U.S.C. 2805 (unspecified minor construction). All minor construction must result in a complete and usable facility. In no event are two or more construction projects or minor and major construction projects to be contrived to be a usable facility. Construction projects at R&D installations and activities whose costs are greater than $750,000 will be financed by the Military Construction appropriation in accordance with Chapter 6.
     
    b. Government-Owned, Contractor-Operated (GOCO) Facility
    (1) When the GOCO facility is on a military installation (post, camp or station) the primary funding is the Military Construction appropriation. However, if the facilities are contractor-operated, and the contractor is solely responsible for the complete and total operation and maintenance of the facility complex, construction may be financed in Procurement or RDT&E in accordance with DoD Directive (DoDD) 4275.5 and 10 U.S.C. 2353 criteria. New construction or improvements having general utility are not authorized under 10 U.S.C. 2353.
    (2) When GOCO facilities are constructed on government property other than a military installation, the Procurement or RDT&E appropriation will finance the construction in accordance with DoDD 4275.5 criteria.
     
    c. Contractor-Owned, Contractor-Operated Facility. Under 10 U.S.C. 2353, a research or development contract may provide for the acquisition, construction, or furnishing of facilities and equipment that are necessary for the performance of the contract to the contractor. Improvements having general utility or new construction are not authorized under 10 U.S.C. 2353. Facilities that would not be readily removable or separable without unreasonable expense may not be installed or constructed on property not owned by the government, unless the contract contains:
    (1) A provision to reimburse the government for the fair value of the facilities;
    (2) An option for the government to acquire the underlying land; or
    (3) An alternative provision that protects the interests of the United States in the facilities.
     
    d. All proposed RDT&E real property facilities will be identified to Congress in accordance with Chapter 5, Section 050402.
     
    e. The Family Housing appropriation will provide for Family Housing construction and Family Housing O&M at R&D installations and activities.

    Therefore, it should be obvious that if a construction project is less than $750,000 and can be directly attributable as required by RDTE activities, that project could be funded with RDTE funds.  It should be equally obvious that if a construction project is more than $750,000 even if it can be directly attributable as required by RDTE activities, that project must be funded with MILCON funds.


    Caution:
      In the past, some organizations have attempted to avoid having to use MILCON funds  by claiming that they had a series of construction projects, all of which were valued at less than $750,000.  The problem is that all of these projects mysteriously combined to become a single building whose value far exceeded $750,000.  Therefore, I will draw your attention to the last three lines of DoD Financial Management Regulation 7000.14-R, Volume 2A, Chapter 1, paragraph 010213, section D.3.i. which I am including below:


    Costs of facilities restoration and modernization projects, not financed by Military Construction appropriations, meeting the current criterion for funding from appropriations available for operation and maintenance are considered expenses. However, this definition does not abrogate the prohibition against the planned acquisition of, or improvements to, a real property facility through a series of minor construction projects (i.e., incremental construction).
     


    Suggestion:
      Read DoD Financial Management Regulation 7000.14-R, Volume 2A, Chapter 1, paragraph 010201, Volume 2A, Chapter 1, paragraph 010213,  Volume 2B, Chapter 6, paragraph 060201and 10 U.S.C. 2805 for a full understanding of the utilization of Military Construction Appropriations.  In addition, since your email address indicates that you are assigned to an Air Force organization, we most strongly recommend  that you contact your local Air Force comptroller organization for more information and their policy interpretation of this issue.


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