FINANCIAL MANAGEMENT POLICY MANUAL

is provided as project restrictions to the appropriated amount of a construction
requirement. Additional authorizations are discussed, such as, restoration of
damaged or destroyed facilities, contingency projects, emergency projects and
environmental response projects. To conclude the section, a paragraph is
devoted to requirements funded outside the Military Construction
appropriations.
(Change 62)
075381 DEFINITION
Construction is the erection, installation, or assembly of a new facility; the
addition, expansion, extension, alteration, conversion, or replacement of an
existing facility; the acquisition of a facility, or the relocation of a facility
from one installation to another. Construction includes equipment installed
and made part of such facilities, the cost of land and rights therein (other than
leasehold), related site preparation, excavation, filling, landscaping, and other
land improvements.
(Change 48)
075382 INSTALLED EQUIPMENT
Installed equipment, sometimes called "built-in equipment," is accessory
equipment and furnishings that are required for operation and affixed as a part
of the building or facility. The equipment is engineered and built into the
facility as an integral part of the final design and as an essential part thereof.
Equipment of this category is considered part of the building or facility and is
normally accounted for under real property class 2. The following items are
typical examples:
1. furniture, cabinets, and shelving (built-in);
2. elevators and escalators;
3. heating, ventilating, and air-conditioning installations;
4. electric generators and auxiliary gear, including facility
Uninterruptible Power Supply (UPS);
5. waste disposers such as incinerators;
6. chapel pews and pulpits.
The initial costs of procurement and installation of installed equipment are
specifically defined as construction costs and shall be included in the cost of a
construction project.
(Change 62)
Financial Management Policy
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