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26 Cards in this Set
- Front
- Back
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What are the three types of funding policies? |
-annual -incremental -full |
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What is annually funded? |
O&M, MILPER Appropriations |
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What is Incrementally funded? What are the exceptions? |
RDT&E 9, 15, and 18 month exception |
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What is usually fully funded? What are the exceptions? |
- Advance Procurement: related to long lead times - Multiyear Procurement: Economic ordering quantities |
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What funding policy applies to O&M and MILPER?
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-Prepare annual budget request on basis of funding needed to operate and maintain DoD activities and pay personnel for a 12 month budget period |
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What is unique regarding the Annual Funding Policy - Service Contract Exception (budgeting for "Fiscal Year" period)
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What does the Annual Funding policy consider?
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-Considers service contracts that cross fiscal years. but do not exceed 12 months
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How is the Incremental Funding Policy applied?
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-It's a budget request on the basis of incremental funding required to cover only those costs expected to be incurred for work during a given fiscal year. |
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What are some of the rationale to use incremental funding? |
-Gov't will obligate funding and pay for the work only performed during a given fiscal year -contractor will perform the work - contractor will incur the cost to perform the work and submit the invoices |
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Identify Incremental Funding Policy Unique Exceptions?
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15 - month - Service or Defense Agency Comptroller must approve extensions of up to 3 months beyond end of the fiscal year for which funds are requested 18 - month - Circumstances where a R&D requirement can not logically be divided; where it is unfeasible to limit the contract to a short period in the second year, or where planned technical effort is such that no responsible contractor would accept a contract for a "less-than-completion" increment |
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How is Full Funding Policy applied? What are the governing concepts? |
Total Estimated Cost - to inform OSD, Congress & Public Usable End Items - No piecemeal procurement of systems allowed Funded Delivery Period - Time period (12 month maximum) during which contracted items are planned to be delivered, starting with planned delivery of the first item |
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What are the two separate views of Full Funding Policy?
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DOD Financial Management Regulation Requirement - from the outset of a procurement program, identification of the total estimated cost of that program is required so "Congress and the public can be fully aware of the dimensions and cost when the program is first presented in the budget" |
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What do you apply Full Funding to?
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Programming and budgeting actions required quantities on a year-to-year basis quantities that can be delivered during a future 12 month period (as a max period) Each separate fiscal year as an independent action |
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Full Funding What are the exceptions for Advance Procurement? |
Lead-time of the item is greater than life of the appropriation Lead-time of items is greater than other components, parts and material of the same end item Efforts must be funded in an advance procurement timeframe to maintain a planned production schedule |
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Full Funding What are the exceptions for Multiyear Procurement? |
Associated with Economic Order Quantity (EOC) of components, parts or material of the end item
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What are Advance Procurement for Long Lead-time Items comprised of?
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Shown in Acquisition Strategy Approved in Milestone Decisions Circumstances that justify use: When necessary to maintain (protect) planned production schedule Lead-time of component greater than life of the appropriation Lead-time component significantly longer than remainder of end item Budgetary Implications: Minimum amount budgeted = termination liability of total cost of long lead-time items being procured Budgeted amount generally requested one fiscal year in advance of related end item contract Budgeted amount is shown as a separate line entry on various budget exhibits |
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Multiyear Procurement (MYP) What are the exception policies? |
After initial MYP approved by Congress, the Service requests - and Congress appropriates - required budget on a "year-by-year" basis to obligate against the contract |
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What are some advantages and problems with Multiyear Procurement?
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Lower costs Stabilizing contractor plans and work forces Continuity of production, avoiding annual start-up and phase out costs Provides incentives for contractors to improve producibility Reduced administrative burden Broaden competitive bases - firms not otherwise willing or able to compete for lesser quantities, especially if high startup costs Potential problems: Govt liable for a penalty for early cancellation of contract Can not budget for that cancellation / termination liability Controversial concept (both in Congress & OSD) |
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What is viable candidate for a Multiyear Procurement Criteria? What requires Congressional approval? |
Substantial savings compared to annual contract buys Stable requirement - stable funding - stable design Realistic estimates of contract cost and savings Promote national security of the United States If Multiyear will be $500M or more Congress makes tradeoff decision: do advantages outweigh disadvantages of loss of flexibility in future budget years, and committing future Congresses Notification if cancellation ceiling exceeds $100M, etc. |
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What is the Cancellation Costs Ceiling for MYP Contracts? |
- non-recurring costs - recurring cost (w/approval of Agency head and USD (C)) Cancellation Ceiling: - negotiated along with other provisions of the contract - A decreasing amount each year - not an additional amount to be budgeted |
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What are the types of Product Improvements? What activities are involved? |
One that increases performance One that does not increase performance Determine how to do the modification Purchase the Modification Kit to improve the product Install the Modification kit on the fielded system9 |
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Reprogramming - How does the realignment of authority from a purpose for which appropriated to finance another requirement apply?
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* Only funds currently available for obligation can be reprogrammed Funds identified in the FYDP can be shifted or moved *A transfer occurs when a reprogramming actions results in movement of budget authority From one appropriation to another |
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What is included in Reprogramming (Congressional approval)?
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* Procurement quantity increase * Affects item of special Congressional interest * Exceeds specific $$ thresholds * Establishes a new program or * Involves the termination of an approved program * Usually done by Services as part of an annual omnibus reprogramming submission |
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What is included in Reprogramming (Internal)?
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* Requires approval of USD (C) * No change in purpose - Docs realignment of funds to a different line item * May be used to correct mistakes in appropriations * Does not mean "Internal to a program" |
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What is included in Reprogramming (Congressional Notification)?
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*Requires 30-day notification to Defense Committee * No action until 30 days after such notification * Establishes a new program * Est. new procurement program, including mods costing <$20M for the entire effort * Est. new development effort costing <$10M for the entire effort * Initiation of safety modifications of <$20M * Termination of programs falling below BTR amounts |
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How many Appropriation Life Cycle's are there and what policy drives it?
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Phase 1 - Current amount (1-5 years) - Available for new obligations, increased scope on existing obligations, payments and adjustments Phase 2 - Expired account (5 years) - Available for payments and adjustments (up and down) to existing obligations - Not available for new obligations or increased scope on existing obligations - FY appropriation, and line item identity remains to enable "changing" original obligation fund cite Phase 3 - no longer available for payments or obligation adjustments - adjustments and payments are charged to currently available appropriation of same type, up to lesser of 1% of currently available appropriation of unexpected balance of closed appropriation - FY appropriation, and line item identity remains only for accounting tracking purposes |
