Navy Working Capital Fund - DON FM&C Website

BUDGET HIGHLIGHTSGeneralThe DMAG Fiscal Year (FY) 2012 President’s Budget submission continues to reflect significantfluctuations in FY 2010 - 2012 workload as a result of battle-damaged equipment and weaponssystems returning from the current Overseas Contingency Operations (OCO). Marine Corpsequipment requires timely repair in order to reconstitute the Operating Forces and the MarineCorps’ Maritime Prepositioning Forces (MPF) Program.FY 2010 actual Net Operating Results (NOR) was $4.7 million, an increase of $12.9 million fromthe FY 2011 President’s Budget that occurred primarily due to increased workload in support ofOCO. The DMAG Budget depicts a positive NOR of $11.1 million in FY 2011 and $20.8 millionnegative NOR for FY 2012 to achieve a zero AOR.Summary of Operations($ in Millions)FY 2010 FY 2011 FY 2012Orders 611.7 381.3 363.9Revenue 579.7 591.8 428.6Cost of Goods Sold 575.0 577.0 443.4Revenue less Costs (NOR) 4.7 14.8 -14.8Surcharges (CIP) 0 -3.7 -6.0Other Changes Affecting AORAccumulated Operating Result (AOR)5.19.80.020.80.00.0In order to ensure achievement of zero AOR in FY 2012, the correct computation of rates, andthe proper resourcing of customer accounts, NWCF budget and manpower estimates have beenupdated from the FY 2011 President’s Budget to reflect all known pricing andprogram/workload assumptions.Orders: New reimbursable orders for FY 2010, FY 2011, and FY 2012 are $611.7 million, $381.3million, and $363.9 million respectively and include the anticipated receipt of supplementalfunding. FY 2010 and FY 2011 new reimbursable orders increase of $336.7 million and $86.0million respectively from the FY 2011 President’s Budget is mainly attributed to receipt ofunplanned funding for the repair of combat-ravaged equipment and weapons systemsreturning from the current OCO. FY 2012 new orders are planned to decrease $17.4 millionfrom FY 2011. The change in new orders in all years is mainly attributed to change in programdue to current operating tempo in theater.Exhibit Narrative