FINANCIAL MANAGEMENT POLICY MANUAL

5. INCREMENTALLY FUNDED MILITARY CONSTRUCTION PROJECTS.
As an exception to the full funding policy, OMB Circular A-11 allows
construction projects to be incrementally funded if the following criteria
are satisfied:
(a) Estimated cost of proposed project is $50 million or more
(b) Construction schedule is 24 months or more
(c) Incrementally funded contracts conform with the FAR to prevent
over-obligation of the government
(d) Configuration of the contract in separate increments will not
significantly increase the cost of the project
Projects proposed for incremental funding must be fully justified during
the annual DON budget review. If approved, the DON will request a
waiver from the full funding policy from OSD. Authorization for the total
cost of the project will be requested in the first year, but authorization of
appropriation and appropriation of funds will be requested only for the
increment being funded in the budget year. If the request is disapproved
by the Deputy Secretary of Defense for lack of adherence to the above
policy, the projects must be fully funded through offsets from the DON.
(Change 65)
075386 EXCLUSIONS
1. CERTAIN MINOR CONSTRUCTION PROJECTS.
a. Minor construction projects for the active forces which cost
$750,000 or less are eligible for financing from appropriations
available for operation and maintenance. Cost computation should
include the value of Supervision, Inspection, and Overhead (SIOH).
Approval authority for this category of minor construction has been
delegated to the major claimants. This includes projects at
Government-owned and Government-operated research and
development activities to be funded within the Research,
Development, Test and Evaluation, Navy (RDT&E,N) appropriation,
and projects in support of NWCF to be funded by NWCF. Projects
approved at a cost of $750,000 or less are constrained in total cost, and
if during execution it appears that an approved project will exceed the
limitation, no work may proceed which will create obligations of the
Government in amount in excess of the limitation. Immediate
notification to the Chief of Naval Operations or the Commandant of
the Marine Corps is required in order to obtain necessary
authorization, dependent upon the revised estimated cost. Minor
construction projects for the reserve forces which cost $750,000 or less
are eligible for financing from appropriations available for operation
Financial Management Policy
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