Navy Working Capital Fund - DON FM&C Website

DEPARTMENT OF THE NAVYNAVY WORKING CAPITAL FUNDTRANSPORTATION‐MILITARY SEALIFT COMMANDNARRATIVEFISCAL YEAR (FY) 2012 BUDGET ESTIMATESFEBRUARY 2010Mission Statement / OverviewThe Military Sealift Command (MSC) is the single manager‐operating agency for sealift services. MSCoperates as a Working Capital Fund (WCF) in two separate entities. This submission addresses MSC’sNavy mission funded by the Navy Working Capital Fund (NWCF), providing support to the FleetCommanders (FLTCOMs) and other DOD activities by providing unique vessels and programs. Thesecond mission, providing sealift support for DOD cargoes in peacetime, is accomplished through theTransportation Working Capital Fund (TWCF) under the auspices of the US TransportationCommand (TRANSCOM). Ship availability for MSC customers is the metric for evaluating missionperformance in the sealift transportation business area.Fuel purchases are one of MSC’s largest expenses. As such any change in fuel prices will have animpact on MSC’s cost of operations, cash balances, and eventually impact MSC customers throughrate changes.Efficiencies and Cost ReductionsThe MSC’s FY 2012 budget estimates reflect the impact of a number of efficiency efforts, overheadcuts, and other cost reductions to include: limiting sustainment costs to eighty percent ofrequirements, various energy conservation savings initiatives, and strategic sourcing. The impact ofthese efficiencies/cost reductions on current budget estimates is a reduction of $0.2 million in FY 2011and FY 2012 and an additional $41.1 million in FY 2012, for cumulative savings of $41.3 million thatwas reapplied to the DON’s force structure and modernization requirements.Activity Group Composition:MSC supports the Fleet Commanders for Pacific and Atlantic Fleets (Commander Pacific Fleet(COMPACFLT) and United States Fleet Forces Command (USFFC), the Naval Sea Systems Command(NAVSEA), the Space and Naval Warfare Systems Command (SPAWAR), the Strategic SystemsPrograms (DIRSSP), the US Air Force, and the National Defense Sealift Fund (NDSF) with uniquevessels and programs. The Maritime Prepositioning Ships (MPS) Restructuring effort began inFY 2006. This effort is to balance sealift requirements with Navy‐owned and chartered assets toeffectively meet sealift demand including the purchase of MPS ships. One ship was purchased inFY 2010. All ships were procured with National Defense Sealift Fund (NDSF) resources.The three programs budgeted through the NWCF are:1. Naval Fleet Auxiliary Force (NFAF): Provides support utilizing civilian mariner manned noncombatantships for material support and ocean going tugs.Narrative