FINANCIAL MANAGEMENT POLICY MANUAL

liquidated damages assessed contractors as a credit offset against the
contracts;
14. project management and administration not otherwise identified
herein.
Detailed guidance on SIOH may be found in the Military Construction
Financial Management Handbook (NAVSO P-1570).
(Change 62)
075384 PROGRAM RESTRICTIONS
1. AUTHORIZED AMOUNT.
Each statement of a construction requirement, or project, is documented
on a Military Construction Project Data form (DD Form 1391), which
delineates the scope of the facility and supporting features and provides an
estimate of their costs. This DD Form 1391 is the basis upon which
annual congressional hearings on projects are held and subsequent
authorization is granted. The limitations placed on exceeding these
amounts are discussed in the following paragraphs. The authorization for
a project expires in two years unless there is a construction start. In order
to start construction the project must not only be authorized; funds must
also be appropriated for the project.
2. TYPES OF VARIATIONS.
Within the military construction program, cost variations are restricted by
individual program amounts, by the scope of work approved by Congress
for individual projects, and by additional items of congressional interest.
The authorized cost variations are provided in 10 U.S. Code 2853 for
Military Construction, Navy (MCON), 10 U.S. Code 2233 for Military
Construction, Naval Reserve (MCNR) and within the provisions of each
Military Construction Appropriation and Authorization Act. The criteria
for evaluating a requirement to increase authorized amounts are that the
cost variations:
a. must be required for the sole purpose of meeting unusual variations
in cost; and
b. could not have been reasonably anticipated at the time the estimate
was submitted to the Congress.
3. PROJECT COST VARIATION.
The cost authorized for a military construction project or the current
working estimate of the cost of the project may be increased by not more
than 25 percent of the amount appropriated for the project by Congress or
$2 million, whichever amount is less. If a cost variation is required above
this amount, a written notification of the facts relating to the proposed
Financial Management Policy
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