Financial Management

Investment Cost consists of production and deployment costs incurred from the beginning of Low-Rate Initial Production (LRIP) through completion of deployment. Typically costs include: [1] Common support equipment Deploying the primary hardware Engineering change orders Industrial Facilities Initial Spares and Repair Parts Military construction Operational/Site Activation Operations and Maintenance Operations and maintenance associated with the …

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A Line of Accounting (LOA) is the funding associated with a federal organization’s budget. By understanding the elements that comprise an LOA. you can determine the Service designator, fiscal year, appropriation, subhead, object class, plant UIC, sub-allotment, authorized accounting activity, transaction type, and Work Breakdown Statement (WBS) element/cost element. Each of the various federal agencies …

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A Life-Cycle Cost (LCC) is the total cost of a program from cradle to grave. (also referred to as Total Ownership Cost (TOC)) LCC consists of Research and Development (R&D) Costs, Investment Costs, Operating and Support Costs, and Disposal Costs over the entire life cycle. These costs include not only the direct costs of the …

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A Funded Delivery Period encompasses a 12-month period that begins when the contractor delivers the first item of a fiscal year procurement. Confusion exists regarding this time period because, in many instances, accurate Administrative Lead-time (ALT) and Production Lead-times (PLT) have not been included in the calculation. The calculation should begin with October 1. From …

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The Incremental Funding Policy states that partial funding of a contract is allowed with additional funds anticipated to be provided at a later time and the amount budgeted shall be limited to the budget authority needed to cover all costs expected to be incurred during a (12) month period. This is used when the total cost of …

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DoD policy requires cost definition criteria that can be used in determining the content of the programs and activities that comprise the Defense budget. Costs are categorized as either expenses or investments. Purchases (i.e., obligations) of non-centrally managed items with a unit cost of $250,000 or less, are considered expenses funded from appropriations available to …

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Are the efforts and/or services identified in the Statement of Work (SOW) consistent and in sync with the President’s budget submission for that specific fiscal year? Is the work/service a bona fide need of the fiscal year sought to be charged? Does the SOW meet the necessary expense test? What appropriation is being charged? Is …

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Full funding is the preferred policy of the Department of Defense (DoD) and the Oversight Congressional Committees and states that procurement and construction account fully fund in one (1) fiscal year the total cost of end-items and construction projects to be acquired. Full Funding Policy Objective The objective is to ensure that Congress and the …

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The Defense Working Capital Fund (DWCF) allows the federal government to purchase and repair activities to account for costs and revenue as if it were a commercial business. The DWCF was established under the authority of Title 10, United States Code (USC) Section 2208, and was effective in fiscal year (FY) 1992. It was established …

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Department of Defense (DD) Form 250 is the Material Inspection and Receiving Report (MIRR) that is required for most contracts for supplies and services. You are required to complete this form with each service submission if your contract includes DFARS Clause 252.246-7000. DFARS Part 246.370 prescribes the inclusion of this clause in solicitations and contracts when …

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