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]


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


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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