Navy Working Capital Fund - DON FM&C Website

CAPITAL INVESTMENT JUSTIFICATION($ in Thousands)Department of the Navy / Base Support / FacilitiesEngineering CommandsFISCAL YEAR (FY) 2012 BUDGET ESTIMATESFEBRUARY 2011FY 2010 FY 2011FY 2012Non-ADPE and TelecommunicationsQuantUnitCostTotalCost QuantUnitCostTotalCost Quant Unit Cost Total CostReplacement Equipment 20 522 10,435 17 680 11,567 13 595 7,733Productivity Equipment 1 774 774 0 0 0 2 452 904New Mission Capability 8 689 5,515 2 1,245 2,490 7 654 4,578Environmental Capability 0 0 0 1 590 590 0 0 0Total 29 16,724 20 14,647 22 13,215Justification:Civil Engineering Support Equipment (CESE) and Industrial Plan Equipment (IPE) - FY 10/11/12 Requirements:#001 - Non-ADPE and Telecommunications Facilities Engineering CommandsRequested CESE and IPE will replace overaged, deteriorated, and obsolete inventory covering the full range of public works support functions, i.e., utilities, maintenance,and transportation. All budgeted CESE replacement items have been reviewed and have been determined to meet activity allowances and replacement economic analysiscriteria. IPE includes metal lathes, metal shear bending or any heavy shop machinery used in the accomplishment of shop fabrications. All requested replacements are insupport of public works workload. The age of existing equipment contributes to downtime and deteriorating output. In particular, inventories of large equipment such ascrawling cranes and / or truck cranes have critical safety lift and operational requirements to meet workload needs. Operational delays for repair or safety downtimes areoffset by leasing where and when available. Leasing equipment ranges from 30% to 60% higher in cost per hour than in-house equipement. Replacements provide formore efficient and safe operations as well as providing the latest technology in public works support capabilities.The timing of placement of these new assets in operation varies depending on the size, complexity, vendor availability, and shipping. Generally, equipment costavoidance begins within 30 - 60 days from receipt of the item.Each FEC has conducted a comprehensive business review of its' equipment inventories and determined an optimal economic approach to containing costs as well asmaintaining minimum interruption to services. The proposed replacements are essential to this strategy. If the proposed equipment replacements are not purchased,substantial opportunity to provide safe and reliable services at the least cost to the Navy will be lost.Exhibit Fund-9B Capital Purchase Justification