FINANCIAL MANAGEMENT POLICY MANUAL

only be utilized in the "Support Cost" section.
3. STANDARD TERMINOLOGY.
The standard terminology follows:
Production engineering
The application of design and analysis techniques to produce a
specified item. Includes functions such as: analysis of producibility
and production operations, processes and systems; applying new
manufacturing methods, tooling and equipment; preparation, test and
technical evaluation of engineering changes to correct deficiencies in
the production item; preparation, test and technical evaluation of
waivers and deviations; value engineering; review and evaluation of
production design data and documentation; production configuration
control; maintenance engineering and logistics supportability efforts
designed and incorporated into the production manufacturing process;
and other related engineering functions which are integral to the item's
manufacture. Production engineering encompasses both nonrecurring
or startup effort to establish a production capability and recurring
effort.
Quality Assurance
The preparation of procedures and the conduct of inspections,
examinations and tests during production that are necessary to deliver
an item of the required quality as specified by the terms of the
contract.
Product Improvement
Engineering services and related effort by the producing contractor or
manufacturing installation, applied to an item in production to extend
the useful military life of such item or to improve the item within the
current performance envelope. Typically, such improvements take
advantage of such things as newly developed materials, progress in
state-of-the-art, improved design and other technical advances which,
when incorporated in production, provide improved safety, reduced
environmental impact, improved
reliability/maintainability/availability, decreased cost, or correction of
deficiencies exclusive of contractual specifications.
Acceptance Test and Evaluation
Test and evaluation of a production item, including components, to
demonstrate that the item fulfills the requirements and specifications
of the procurement contract or agreement. The costs to conduct the
tests, such as range charges and expendable/consumable items, as well
as preparation of the test plan, data analysis and evaluation, are
included.
Financial Management Policy
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