FINANCIAL MANAGEMENT POLICY MANUAL

. other production support services necessary to produce the item,
which are performed by the manufacturer, should be fully funded in
the fiscal year program that the item is budgeted;
c. other production support services performed by either Government
support activities or support contractors should be budgeted on an
annual basis;
d. budgeting of production support services on an annual basis, as
described in items 2 and 4, assumes a multi-fiscal year procurement
program. If the procurement is a one-time buy in a single fiscal year
budget line item, all production support services should be fully
funded in that fiscal year. Similarly, the last fiscal year containing
end-items of a multi-fiscal year procurement program should include
all production support services necessary to complete the program.
The intent is to avoid a request for production support funding in a
fiscal year in which no end-items are budgeted;
e. Shipbuilding and Conversion, Navy (SCN) programs should be
fully funded to include all costs necessary to construct/convert/acquire
a ship, subject to time-phased procurement and advance procurement
guidance.
3. BUDGETING FOR SPARES AND REPAIR PARTS.
Funding will be requested for a 12-month delivery period lead-time away
from need. Spares and repair parts funding will be fully committed in the
first year of availability. Funding will budget based on 100 percent of
commitments in the first year of availability. Spare parts will not be
funded in a fiscal year prior to the end-item they support. A waiver of this
policy may be granted by USD (C) if an economic analysis indicates that
other procedures would be cost effective.
4. BUDGETING FOR POST DELIVERY PROJECTS.
Within the SCN appropriation, costs associated with post delivery projects
are budgeted as annual requirements usually in the year of post shakedown
availability (PSA). In distinguishing between the ship end cost and the
post delivery costs, the following guidance pertains:
a. Ship end cost.
Ship end cost includes, in addition to the basic ship construction or
conversion cost, deferred work identified prior to ship delivery,
and the following items when unrelated to a specific fix: normal
changes authorized prior to completion of fitting out (CFO),
advanced planning, and travel.
b. Post delivery.
Post delivery funding includes design, planning, government
Financial Management Policy
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