FINANCIAL MANAGEMENT POLICY MANUAL

Paragraph 3d addresses minor construction projects funded in the
operation and maintenance accounts. Only funds authorized to the
Secretary of the Navy (SECNAV) for minor construction projects may
be used to accomplish minor construction projects, except that
SECNAV may spend, from appropriations available for operation and
maintenance, amounts necessary for any project costing not more than
$750,000.
b. Approval Levels.
The Secretary of the Navy must approve all minor construction
projects costing more than $750,000. This authority is delegated to the
Assistant Secretary of the Navy (Installations and Environment).
Congress must be notified in writing of the intended execution of all
unspecified minor construction projects costing over $750,000. The
project may be carried out only at the end of a 21-day period,
beginning on the date notification is received by the House and Senate
Military Construction Appropriations Subcommittees, unless an
objection has been made. Such notification applies only to unspecified
minor construction projects and is not required for projects specifically
authorized and appropriated in the annual military construction acts.
For projects which cost $750,000 or less, approval authority has been
delegated to the Chief of Naval Operation (CNO) and the
Commandant of the Marine Corps (CMC). Projects which cost
$750,000 or less are eligible for financing from appropriations
available for operation and maintenance. Approval authority for this
category of minor construction has been delegated to the major
claimants.
c. Cost Increases.
The approved amount for a minor construction project may be
increased above $1.5 million if SECNAV determines that such an
increase is required for the sole purpose of meeting unusual variations
in cost and that the cost variation could not have been reasonably
anticipated at the time the project was originally approved.
Congressional approval is required if the current working estimate of
the cost exceeds $1.5 million and is more than 200 percent of the
original approved amount for the project. From the date of submission
to Congress of the request for approval of the cost increase, 21 days
must elapse before approval may be assumed. After a contract for a
project has been entered into, SECNAV can fund the project above the
project amount approved by Congress in order to meet the costs of
change orders or contractor claims. If a project cost variation has not
been provided to Congress, SECNAV must report the revised cost of
the project to Congress only if it exceeds the approved amount by 25
percent. If a project cost variation has been previously approved by
Financial Management Policy
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