FINANCIAL MANAGEMENT POLICY MANUAL

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. Procurement Appropriations The purchase of IT, AIS, and general communication equipment is subject to the expense/investment threshold, the criteria for which is discussed in paragraph 075001. Acquiring and deploying a complete system with a cost of $100,000 or more is an investment and should be budgeted in a procurement appropriation. A complete system cost is the aggregate of all components (e.g. equipment and software) that are part of and function together as a system to meet an approved documented requirement. For modification efforts, only the cost of the upgrade (e.g. new software, hardware and labor) is counted towards the investment threshold. The total cumulative cost of the system is not considered when deciding the appropriate appropriation to fund modernization. (1) Proprietary software carries a copyright from the vendor that prohibits duplication or modification. Essentially, the purchaser is buying a license from the vendor to use the software on a particular system. Proprietary software is an investment, subject to the expense-investment criteria, unless it is financed on an “annual fee” basis. In the latter case, it is an expense item properly financed in RDT&E or O&M. Software procurements made under the Enterprise Software Initiative may be made through use of the Navy Working Capital Fund. (2) Procurement of fully developed and tested modification kits and associated installation, including labor costs, should be financed from a procurement appropriation. (3) Equipment purchased after successful system testing and a favorable fielding decision should be bought with procurement funding. c. O&M Appropriations Expenses incurred in continuing operations and current services are budgeted in the O&M appropriations. Modernization costs under $100,000 are considered expenses, as are one-time projects such as developing planning documents and studies. (1) Software releases categorized as iterations on the basic release and not involving significant performance improvements or extensive testing are considered a maintenance effort. Minor improvements in software functionality accomplished during routine maintenance may also be O&M funded. (2) Items purchased from a commercial source that can be used without modification (e.g., COTS and non-developmental items) will be funded in either the procurement or O&M Financial Management Policy 3-162
appropriations, as determined by the expense and investment criteria. d. Navy Working Capital Funds. The IT systems developed and acquired through the Navy Working Capital Fund will be reflected in the capital budget if the system is $100,000 or more. Additional information regarding capital investments can be found in the DOD FMR Volume 2B, Chapter 9, paragraph 090103 and in paragraphs 074602 and 074603 of this volume. Systems costing less than $100,000 are funded through the operating budget. e. Capitalization of Software Costs. For accounting purposes, the total cost of software should be capitalized when the total cost of the system exceeds the Department’s capitalization threshold amount, which is currently $100,000. Capitalization of software is not dependent on the appropriation used to fund its purchase or development. Further information on capitalization may be found in DOD FMR, Volume 4, Chapter 6, paragraph 060210. (Change 67) 075372 TACTICAL/STRATEGIC INFORMATION TECHNOLOGY 1. SCOPE. The provisions of this paragraph are applicable to software for all tactical and strategic systems and equipment. These systems are also referred to as special purpose equipment and/or embedded computer systems. 2. BUDGET <strong>POLICY</strong> a. Initial Software Acquisition. All costs related to executive and applications software feasibility studies, system design, development, preparation, modification, integration, and test and evaluation, including interfaces with other equipment/systems, will be budgeted in the Research, Development, Test and Evaluation, Navy (RDT&E,N) appropriation as an element of the equipment/system development program. RDT&E,N will finance all efforts necessary to deliver the computer programs and documentation necessary for operational use. Integration of available software, i.e., software already developed, in new combinations/applications or for conversion/application to a new equipment/system will also be budgeted in the RDT&E,N appropriation. The intent of this policy is that RDT&E,N will fund all work leading up to a service approved operational software program Financial Management Policy 3-163
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UNCLASSIFIED DEPARTMENT OF THE NAVY
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Brief of Revisions Following are th
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22.075322. Revises paragraph to pro
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Change Numbers And Issuance Dates C
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074005 Management Funds............
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074562 Budget Formulation .........
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Section VI: Interservice and Interd
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FINANCIAL MANAGEMENT POLICY MANUAL
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NAVSUP P-409 or P-437 using AUTODIN
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apportionment requests for appropri
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2. TEMPORARY LAPSE IN APPROPRIATION
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military functions covered by the a
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commands or activities, prior to re
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appropriation level, prepared on an
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other subdivision of the appropriat
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intention that they be considered a
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newly authorized. Distribution of a
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increasing the allotment or for imp
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Chiefs of Staff, and to activities
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claimant financial authority made a
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authorized by the agent will be sig
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a. Military Personnel: Cumulative i
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upward obligation adjustments durin
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Appropriation Program, Project and
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each account being charged; or the
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7. Sources. Additional information
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appointment of the ADA investigator
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also provided for research, develop
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SECNAVINST 7040.10 as to primary an
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elements of the FYDP structure. In
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is sent to the Office of the Comptr
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6. special duty assignment pay; 7.
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the President's annual budget. The
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6. basic pay, inactive duty trainin
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c. Special Training. Special traini
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f. Senior Reserve Officers' Trainin
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(Change 67) 2. subsistence; 3. trav
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deposits, gratuities, permanent cha
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extended active duty, including eme
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Reserve Personnel, Marine Corps (RP
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3. BUDGET ACTIVITY 2, OTHER TRAININ
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4. other pay and allowances, enlist
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types of programs such as the Marin
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"For expenses, not otherwise provid
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position subhead. A single position
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AG's program value. Reprogramming b
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position subhead. A single position
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may be further divided into managem
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2. FISCAL YEAR 1994 AND SUBSEQUENT:
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This substitution allows calculatio
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to limitations stated in the curren
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programs for ease of administration
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prior to approval of title, as foll
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available for obligation commencing
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procurement programs, all estimates
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2. Extended Period of the Appropria
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with the expressed desires of Congr
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3. EXECUTION a. Program-Year Concep
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2. BUDGET ACTIVITY 1, NAVY AMMUNITI
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074360 SCOPE 1. GENERAL. Section V:
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and special shore activities with e
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the Office of Management and Budget
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obligation adjustments and payments
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3. EXECUTION. a. General. PMC is co
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3. BUDGET ACTIVITY 2, APPLIED RESEA
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changes by the ONR Comptroller. 4.
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is designed to accelerate obligatio
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Congress, SECNAV must report to Con
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First two digits - Administering of
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project for an existing facility mu
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d. Operation and Maintenance Limita
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Section III: FAMILY HOUSING, NAVY A
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(8) restorations of dwelling unit o
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2275) also issued, as appropriate;
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eprogramming purposes and any repro
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estoration: Provided further, That,
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5. OPERATION AND MAINTENANCE. This
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After Mission Ceases BOS BRAC or O&
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applies to both direct funded and N
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2. FUND MANAGEMENT. All cash, funct
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sustainment, restoration and modern
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7000.14-R, Financial Management Reg
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programs to pay for potentially hig
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customers, to include the costs of
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. Ship Acquisition. The ship acquis
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g. Economy Act orders will be issue
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U.S. Code 2601. Under the provision
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The Navy Supply Systems Command (NA
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(1) completion of 30 years of servi
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obligation of estimated collections
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nonappropriated funds (NAF) will be
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074727 KAHO'OLAWE ISLAND CONVEYANCE
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074741 MILITARY ASSISTANCE (TRANSFE
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eceives full reimbursement for cost
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expenses incurred by DON, supportin
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automatic reimbursement authority a
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performed in connection with delive
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existing prior year orders may be a
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Chapter 3 FINANCIAL RESPONSIBILITY
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components are part of and function
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Group 13) are considered investment
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h. Procurement/Production Program C
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one of three ways, as prescribed in
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5. CHANGING BASIS OF SUPPORT a. Tim
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3. POLICY. Functional transfers sho
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year and budget year columns of the
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eal property. The activity with the
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075122 SIGNIFICANT COSTS Costs to t
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a. Shelter/Subsistence · Galley -
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SPECIAL CIRCUMSTANCES IN SUPPORT RE
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activities, in this instance, are n
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number of cars to be used related t
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funding responsibility of the Naval
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. Cognizance Symbol 0I. Cognizance
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connection with assignment to and d
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Services Administration, Part 101-4
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. Organizational Component. The ter
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or Head Quarters, U.S. Marine Corps
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075147 LONG-TERM TRAINING AND EDUCA
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c. Boats. Boats are water-borne non
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etc.) is also chargeable to that ac
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to the major claimant having lease/
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duties. Organizational clothing (wh
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c. Waived Costs. Costs of support t
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(Change 63) c. Staffing. Civilian p
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and, therefore, is funded by COMNAV
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y the activity that provides the se
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(7) Nonscope Claims. By 10 U.S.C. 2
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such payments from existing operati
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personnel who are paid from appropr
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assignment to an advisory group wil
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c. Transportation and Handling Perf
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authorized under the criteria state
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Program shipments, the cost is reim
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075182 TRANSPORTATION OF MARINE COR
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appropriations in support of TAD tr
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g. Special Assignments. Special ass
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TRAVEL REQUIREMENT FUNDED BY Guards
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TRAVEL REQUIREMENT FINANCIAL RESPON
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udget responsibility of the Militar
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075186 TRAVEL AND TRANSPORTATION AL
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to the next permanent CONUS duty st
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075188 TRAVEL IN CONNECTION WITH RE
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authority, and are accepted if such
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(1) Common-Use Facility. A "common-
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e provided by the host without reim
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. Common-Service Activity. A common
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MANAGEMENT MILITARY DEPARTMENT ACTI
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tuition-free basis. The cost of suc
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. Budget Policy (Change 63) (1) Bas
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conditions directs the storage or m
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. NCR Space. The Administrative Off
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each military department. The amoun
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o. investment equipment in support
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essential for the provision of exec
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6. CHILD CARE. Naval facilities may
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to prevent waste, loss and unauthor
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5. RESPONSIBILITIES a. BUPERS (PERS
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2. MILITARY CONSTRUCTION. Military
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A Academy Gift and Museum Fund ....
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ASN (Installations & Environment) (
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Command support equipment .........
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General ...........................
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Port Services .....................
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Interim contractor support (ICS) ..
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Defense Health Program.............
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Oceanography ......................
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Programs, Major Future Years Defens
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S Sailaway concept ................
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In Kind ...........................
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Utilities Appropriations, MCON ....
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