FINANCIAL MANAGEMENT POLICY MANUAL

2. STANDARD DEFINITIONS.
Standard definitions have been developed for initial, replenishment, and
war reserve spare parts to ensure consistency in systems spare parts
pricing for budgeting and Selected Acquisition Reports (SARS). The
following applies:
a. Initial Spare Parts.
Initial spare parts will include those repairable components,
assemblies, or subassemblies required as initial stockage at all levels
including the pipeline in support of newly fielded end-items. Whole
spare engines are covered by separate guidance and will be classified
as initial spare parts through the life of the system.
b. Replenishment Spare Parts.
Replenishment spare parts will include those repairable components,
assemblies, or subassemblies required to resupply initial stockage or
increase stockage for reason other than support of newly fielded end
items. Replenishment would include additional stockage due to
increases in usage, readiness initiatives, and redeployment of enditems.
c. War Reserve Spare Parts.
War reserve spare parts will be budgeted as replenishment.
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075342 PRODUCTION SUPPORT SERVICES
1. GENERAL.
Standard terminology and a cost breakdown structure have been
developed to categorize and display production support service costs in the
Procurement appropriation budget backup exhibits. It is not necessary to
utilize each element of the standard cost breakdown structure in every P-1
line item. Rather, the standard cost elements should be utilized in the
budget backup exhibits as necessary when production support services are
separately identified in a P-1 line item. Production support services are
not required to be separately identified, but when they are, the standard
cost elements should be utilized in lieu of other terminology.
2. STANDARD COST BREAKDOWN.
The standard cost breakdown structure consists of Production
Engineering, Quality Assurance, Product Improvement, Acceptance Test
and Evaluation, Contractor Engineering and Technical Services (CETS).
These cost elements may be utilized under both the "Flyaway Cost" and
"Support Cost" section in the budgets exhibits when these major cost areas
are segregated (usually for major weapon systems). However, CETS can
Financial Management Policy
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