Appropriated funds are divided into two (2) basic types; (1) investment funds and (2) expense funds. The defining of an acquisition as either investment or expense, or even a combination of the two, is not always simple. Generally, however, the following definitions apply. [1]

Investment:

Includes the cost of real property and capital assets which expand or add to DoD’s current capability. This includes, but is not limited to, the following examples:

  • Items of equipment or systems costing more than $250,000 (as of fiscal year 2009)
  • Centrally managed items regardless of cost
  • Certain categories of civilian labor associated with the acquisition or modification of investment funded items
  • The initial outfitting of a system procured with investment funds, even if the individual items themselves would normally be expense items
  • Site preparation and the installation of investment funded equipment
  • The training of an initial cadre of operators and maintenance personnel for an investment funded training system
  • Items defined or designated as investment

Expenses:

Includes the cost of assets consumed in the operation and maintenance of DoD facilities and equipment. This includes, but is not limited to, the following examples:

  • Most labor of civilian and military personnel
  • Non-centrally managed equipment items or systems costing $250,000 or less (as of FY 2010)
  • Contractual services supporting expense type efforts
  • Rental/lease of equipment and facilities
  • The repair/maintenance/rework/overhaul of capital equipment and facilities
  • Modifications to investment equipment that are mainly for reliability, maintainability, or safety purposes
  • Expendable supplies and materials
  • The replacement of initially outfitted materials
  • Licenses and subscriptions

See Appropriation Categories for more details on specific appropriation funds.

AcqLinks and References:

Updated: 7/20/2017

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