Advance Procurement (AP) (FAR 32.4, DFARS 217.1) is authority provided in an appropriations act to obligate and disburse funds during a Fiscal Year (FY) before that in which the related end item is procured. The funds are added to the Budget Authority (BA) for the FY and deducted from the BA of the succeeding FY. It’s primarily used in Major Defense Acquisition Programs (MDAP) to obtain components whose long lead time (LLT) requires early purchase in order to reduce the overall Procurement Lead Time (PLT) of the major end item. AP of long-lead components is an exception to the DoD “full funding” policy and must be part of the President’s Budget (PB) request. Advanced Procurement is also called Advanced Funding.
DFARS Definition: “Advance procurement” means an exception to the full funding policy that allows acquisition of long lead time items (advance long lead acquisition) or economic order quantities (EOQ) of items (advance EOQ acquisition) in a fiscal year in advance of that in which the related end item is to be acquired. Advance procurements may include materials, parts, components, and effort that must be funded in advance to maintain a planned production schedule. [2]
Advance Procurement Example
Advance procurement should be debited and credited according to the lead times of the advance procurement. For instance, if FY 2008 and FY 2009 advance procurement funds are required for an FY 2010 procurement, the FY 2008 Advanced Procurement funds would be debited in FY 2008, the FY 2009 Advanced Procurement funds would be debited in FY 2009, and the total of the FY 2008 and FY 2009 Advanced Procurement funds would be credited in FY 2010. See chart below. [1]
Chart: Advanced Procurement Example [1]
Types of Funding Policy
The following are the main types of funding policies in the Government:
- Incremental Funding
- Full Funding
- Advanced Procurement Funding
AcqLinks and References:
- [1] DoD 7000.14-R, Volume2B, Chapter 4 “Procurement Appropriations” Exhibit P-1, page 5 of 8
- Navy Multiyear Procurement Guidebook – Nov 2010
- Navy Multiyear Procurement Guidebook – Nov 2010
- Website: FAR 32.4 “Advance Procurement of Non-Commercial Items”
- [2] Website: DFAR Subpart 217.1 – Multi-Year Contracting
Updated: 3/04/2021
Rank: G1