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Modification Management

ALCL 087


A configuration change to the form, fit, function, or interface (F3I) of an in-service, configuration-managed or produced Configuration Item (CI). Modifications are defined by their purpose. A capability modification alters the F3I in a manner that requires a change to the existing system, performance, or technical specification of the asset. Such modifications are accomplished to add a new capability or function to a system or component, or to enhance existing technical performance or operational effectiveness. A sustainment modification alters the F3I of an asset in a manner that does not change the existing system, performance, or technical specification of the asset. Such modifications correct product quality deficiencies, or to bring the asset in compliance with established technical or performance specification(s) associated with the asset. Sustainment modifications may improve the reliability, availability, maintainability, or supportability reduce its ownership costs.

General Information

In accordance with and consistent with limitations prescribed in Title 10 USC 2244a and DoD Instruction (DoDI) 5000.28, Major Capability Acquisition, DoD Components will initiate system modifications at Milestone (MS) C and beyond, as necessary, to improve performance, enhance sustainability, and reduce ownership costs. Modification information will be captured in program baseline documentation to include the Product Support Strategy (PSS) and addressed during specified decision points throughout the program life cycle.  Planned and implemented major modifications may trigger additional decision points when there are changes to the support package including current risks and cost reduction activities.

How are modifications funded? According to Volume 2A, Chapter 1, Para 0102 "Funding Policies", of the DoD 7000.14-R, Financial Management Regulation (FMR), "the costs of modification kits, assemblies, equipment, and material for modernization programs, ship conversions, major reactivations, major remanufacture programs, major service life extension programs, and the labor associated with incorporating these efforts into or as part of the end item are considered investments. All items included in the modification kit are considered investment even though some of the individual items may otherwise be considered as an expense. Components that were not part of the modification content at the outset and which are subsequently needed for repair are expenses. The cost of labor for the installation of modification kits and assemblies is an investment."

In addition, DoD 7000.14-R goes on to differentiate between technology refreshment (Tech Refresh)/ insertion and modifications, and how they are funded, stating that "continuous technology refreshment is the intentional, incremental insertion of newer technology to improve reliability, improve maintainability, reduce cost, and/or add minor performance enhancement, typically in conjunction with depot or field level maintenance. The insertion of such technology into end items as part of maintenance is funded by the operation and maintenance appropriations. However, technology refreshment that significantly changes the performance envelope of the end item is considered a modification and, therefore, an investment."

It is important to note that Title 10 USC 2460, Definition of depot-level maintenance and repair, states that "depot-level maintenance and repair means 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. The term includes all aspects of software maintenance classified by the Department of Defense as of July 1, 1995, as depot-level maintenance and repair, and interim contractor support or contractor logistics support (or any similar contractor support), to the extent that such support is for the performance of services described in the preceding sentence."

The statute, however, goes on to list two major exceptions, namely that:

  1. The term (depot level maintenance and repair) does not include the procurement of major modifications or upgrades of weapon systems that are designed to improve program performance or the nuclear refueling of an aircraft carrier. A major upgrade program covered by this exception could continue to be performed by private or public sector activities.
  2. The term also does not include the procurement of parts for safety modifications. However, the term does include the installation of parts for that purpose.